[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23193]

Vol. 81

Friday,

No. 190

September 30, 2016

Part IV

Department of Defense

General Services Administration

National Aeronautics and Space Administration

-----------------------------------------------------------------------

48 CFR Chapter 1, et al.

Federal Acquisition Regulations; Final Rules

Federal Register / Vol. 81 , No. 190 / Friday, September 30, 2016 / Rules and Regulations

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket No. FAR 2016-0051, Sequence No. 5]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-91; Introduction

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Summary presentation of interim and final rules.

-----------------------------------------------------------------------

SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-91. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at http://www.regulations.gov.

DATES: For effective dates see the separate documents, which follow.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the table below in relation to the FAR case. Please cite FAC 2005-91 and the specific FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755.

Rules Listed in FAC 2005-91

Item

Subject

FAR case

Analyst

I

Prohibition on Contracting with Corporations with Delinquent Taxes or a Felony Conviction.

2015-011

Davis.

II

Updating Federal Contractor Reporting of Veterans' Employment.

2015-036

Delgado.

III

Non-Retaliation for Disclosure of Compensation Information (Interim).

2016-007

Delgado.

IV

Sole Source Contracts for Women-Owned Small Businesses.

2015-032

Uddowla.

V

Unique Identification of Entities Receiving Federal Awards.

2015-022

Delgado.

VI

Consolidation and Bundling.

2014-015

Uddowla.

VII

Amendment Relating to Multi-year Contract Authority for Acquisition of Property.

2016-006

Jackson.

VIII

New Designated Countries--Ukraine and Moldova.

2016-009

Davis.

VIII

Contractors Performing Private Security Functions.

2014-018

Jackson.

VIIII

Limitation on Allowable Government Contractor Employee Compensation Costs.

2014-012

Hopkins.

IX

Technical Amendments.

   

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-91 amends the FAR as follows:

Item I--Prohibition on Contracting With Corporations With Delinquent Taxes or a Felony Conviction (FAR Case 2015-011)

DoD, GSA, and NASA are adopting as final, without change, an interim rule, which amended the FAR to implement sections of the Consolidated and Further Continuing Appropriations Act, 2015. The rule prohibits the Federal Government from entering into a contract with any corporation having a delinquent Federal tax liability or a felony conviction under any Federal law, unless the agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government.

This final rule will not have a significant economic impact on a substantial number of small entities.

Item II--Updating Federal Contractor Reporting of Veterans' Employment (FAR Case 2015-036)

DoD, GSA, and NASA are adopting as final, without change, an interim rule amending the FAR to implement a final rule issued by the Department of Labor's Veterans' Employment and Training Service (VETS) that revised the regulations at 41 CFR part 61 implementing the reporting requirements under the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), as amended and the Jobs for Veterans Act (JVA) (Pub. L. 107-288). VEVRAA requires Federal contractors and subcontractors to annually report on the total number of their employees who belong to the categories of veterans protected under VEVRAA, as amended by the JVA, and the total number of those protected veterans who were hired during the period covered by the report. The VETS rule requires contractors and subcontractors to comply with its revised reporting requirements using the Form VETS-4212, in lieu of the VETS-100 and VETS-100A, beginning with the annual report filed in 2015.

There is no significant impact on small entities imposed by the FAR rule.

Item III--Non-Retaliation for Disclosure of Compensation Information (FAR Case 2016-007) (Interim)

DoD, GSA, and NASA are issuing an interim rule amending the FAR to implement Executive Order (E.O.) 13665, Non-Retaliation for Disclosure of Compensation Information, amending Executive Order 11246, Equal Opportunity in Federal Employment. The E.O. was signed April 8, 2014. The interim rule is also implementing the final rule issued by the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor (DOL) to implement the E.O. The DOL final rule was published in the Federal Register at 80 FR 54934, on September 11, 2015, entitled Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions.

E.O. 11246, originally issued September 24, 1965, establishes nondiscrimination and affirmative action obligations in employment for Federal contractors and subcontractors. It prohibits employment discrimination because of race, color, religion, sex, sexual orientation, gender identity, and national origin. E.O. 13665 amends E.O. 11246 and its Equal Opportunity Clause by incorporating, as a Covered prohibition, discriminating against employees and job applicants who inquire about, discuss, or disclose the compensation of the employee or applicant or another employee or applicant. Federal contractors and subcontractors must disseminate this nondiscrimination provision, using language prescribed by the Director of OFCCP, including incorporating the provision into existing employee manuals or handbooks and posting it. There is no significant impact on small entities imposed by the FAR rule.

Item IV--Sole Source Contracts for Women-Owned Small Businesses (FAR Case 2015-032)

DoD, GSA, and NASA are adopting as final, with a minor edit, an interim rule that amends the FAR to implement regulatory changes made by the Small Business Administration (SBA) in its final rule as published in the Federal Register at 80 FR 55019, on September 14, 2015. SBA's final rule implements the statutory requirements of paragraph (a)(3) of section 825 of the Carl Levin and Howard P. `Buck' McKeon National Defense Authorization Act for Fiscal Year 2015, Public Law 113-291, which grants contracting officers the authority to award sole source contracts to economically disadvantaged women-owned small business (EDWOSB) concerns and to women-owned small business (WOSB) concerns eligible under the WOSB Program. The anticipated price, including options, must not exceed $6.5 million for manufacturing North American Industry Classification System (NAICS) codes, or $4 million for other NAICS codes.

This rule may have a positive economic impact on women-owned small businesses.

Item V--Unique Identification of Entities Receiving Federal Awards (FAR Case 2015-022)

DoD, GSA, and NASA are issuing a final rule amending the FAR to redesignate the terminology for unique identification of entities receiving Federal awards. The change to the FAR eliminates references to the proprietary Data Universal Numbering System (DUNS[supreg]) number, and provides appropriate references to the Web site where information on the unique entity identifier used for Federal contractors will be located. The Government does not intend to move away from the use of the DUNS[supreg] number in the short term. This final rule also establishes definitions of ``unique entity identifier'', and ``electronic funds transfer (EFT) indicator''. There is no significant impact on small entities imposed by the FAR rule.

Item VI--Consolidation and Bundling (FAR Case 2014-015)

This final rule incorporates regulatory changes made by the SBA in its final rule which published in the Federal Register at 78 FR 61113 on October 2, 2013, concerning consolidation and bundling. SBA's final rule implements sections 1312 and 1313 of the Small Business Jobs Act of 2010 (Pub. L. 111-240), as well as section 1671 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 (Pub. L. 112-239). The FAR final rule adds coverage on consolidations and reorganizes coverage on bundling at FAR 7.107. Before conducting a consolidated acquisition estimated to exceed $2,000,000, the Senior Procurement Executive or Chief Acquisition Officer must make a written determination that the consolidation is necessary and justified. This rule may have a positive economic impact on any small business entity that participates in the Federal procurement arena.

Item VII--Amendment Relating to Multi-Year Contract Authority for Acquisition of Property (FAR Case 2016-006)

DoD, GSA, and NASA are amending FAR subpart 17.1 to implement section 811 of the NDAA for FY 2016 (Pub. L. 114-92). Section 811 amended subsection (a)(1) of 10 U.S.C. 2306b by striking ``substantial'' and inserting ``significant''. This rule makes conforming changes at FAR 17.105-1(b)(1) to state that the head of an agency may enter into a multi-year contract for supplies, if the use of such a contract will result in significant savings of the total estimated costs of carrying out the program through annual contracts.

This change applies to the DoD, NASA, and the Coast Guard.

This final rule is not required to be published for public comment, because it addresses an internal decision by the contracting officer to enter into a multi-year contract for supplies if certain objects are met. These requirements affect only the internal operating procedures of the Government.

Item VIII--New Designated Country--Ukraine and Moldova (FAR Case 2016-009)

This final rule amends the FAR to add Ukraine and Moldova as new designated countries under the World Trade Organization Government Procurement Agreement (WTO GPA). This final rule has no significant impact on the Government and contractors, including small business entities.

Item IX--Contractors Performing Private Security Functions (FAR Case 2014-018)

This final rule amends FAR 25.302 and the clause at 52.225-26, both entitled ``Contractors Performing Private Security Functions Outside the United States.''

This rule removes the DoD-unique requirements, which have been incorporated in the Defense Federal Acquisition Regulations Supplement (DFARS). This rule also adds the definition of ``full cooperation'' to FAR clause 52.225-26 in order to affirm that the contract clause does not foreclose any contractor rights arising in law, the FAR, or the terms of the contract when cooperating with any Government-authorized investigation into incidents reported pursuant to the clause.

This rule will not create any new reporting, recordkeeping, or other compliance requirements. The impact of this rule on small business is not expected to be significant.

Item X--Limitation on Allowable Government Contractor Employee Compensation Costs (FAR Case 2014-012)

This final rule converts the interim rule published in the Federal Register at 79 FR 35865 on June 24, 2014 to a final rule with minor changes including a table summarizing the employee compensation limits and applicability dates is added at 31.205-6(p); several paragraphs are reorganized; redundant text is removed; reference links are added for clarity.

This final rule amends the Federal Acquisition Regulation (FAR) to implement section 702 of the Bipartisan Budget Act of 2013. Section 702 revises the allowable compensation cost limit for contractor and subcontractor employees to be $487,000, as adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics. Also, section 702 allows for the narrowly targeted exceptions to this allowable cost limit for scientists, engineers or other specialists, upon an agency determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. Because most contracts awarded to small businesses use simplified acquisition procedures or are awarded on a competitive, fixed-price basis, the impact of this compensation limitation on small businesses will be minimal.

Item XI--Technical Amendments

Editorial changes are made at FAR 1.603-1, 4.1400, 22.805, 23.704, 26.103, and 52.234-1.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Federal Acquisition Circular (FAC) 2005-91 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.

Unless otherwise specified, all Federal Acquisition Regulation (FAR) and other directive material contained in FAC 2005-91 is effective September 30, 2016 except for items V, VI, VII, VIII, and IX, which are effective October 31, 2016.

Dated: September 20, 2016.

Claire M. Grady,

Director, Defense Procurement and Acquisition Policy.

Dated: September 20, 2016.

Jeffrey A. Koses,

Senior Procurement Executive/Deputy CAO, Office of Acquisition Policy, U.S. General Services Administration.

Dated: September 20, 2016.

William G. Roets,

Acting Assistant Administrator, Office of Procurement National Aeronautics and Space Administration.

[FR Doc. 2016-23193 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23194]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 9, 12, and 52

[FAC 2005-91; FAR Case 2015-011; Item I; Docket No. 2015-0011, Sequence No. 1]

RIN 9000-AN05

Federal Acquisition Regulation; Prohibition on Contracting With Corporations With Delinquent Taxes or a Felony Conviction

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA have adopted as final, without changes, an interim rule amending the Federal Acquisition Regulation (FAR) to implement sections of the Consolidated and Further Continuing Appropriations Act, 2015, to prohibit the Federal Government from entering into a contract with any corporation having a delinquent Federal tax liability or a felony conviction under any Federal law, unless the agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government.

DATES: Effective: September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement Analyst, at 202-219-0202 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2015-011.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 80 FR 75903 on December 4, 2015, to implement sections 744 and 745 of Division E of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and section 523 of Division B of the same act. Three respondents submitted comments on the interim rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments are provided as follows:

A. Summary of Public Comments

There were no changes made in the final rule as a result of the three public comments.

B. Analysis of Public Comments

1. Need for the Rule

Comment: Two respondents expressed support for the interim rule. According to the respondents, this rule will facilitate more rigorous scrutiny of companies with a recent Federal conviction or unpaid Federal taxes and will help ensure that Federal contractors conduct themselves with the highest degree of integrity and honesty.

Response: Noted.

Comment: The other respondent said the rule is unnecessary, given the existing statutory and regulatory framework. This respondent noted that tax and criminal statutes already include penalties for tax delinquency and felony conviction, such as the Internal Revenue Code (title 26) and the Criminal Code (title 18). Furthermore, the respondent noted that the FAR already includes Federal tax delinquency and criminal malfeasance as causes for debarment. The respondent stated that agencies already reliably utilize suspension and debarment processes.

Response: This rule is necessary to implement the requirements of sections 744 and 745 of Division E, title VIII of the Consolidated and Further Continuing Resolution Appropriations Act, 2015, as well as section 523 of Division B, title V of the same act (affects Commerce, Justice, NASA, and some related agencies). These appropriations act restrictions, although having some overlap with existing laws, have specific provisions that are not identical to existing laws and regulations, and must be implemented in order to avoid misuse of appropriated funds.

2. Meaning of ``Corporation''

Comment: One respondent requested clarification as to what entities are and are not corporations for the purposes of this rule. The respondent stated that the term ``corporation'' could encompass C corporations, S corporations, and limited liability corporations (LLCs), among others. The respondent is concerned that if the rule applies to LLCs and S corporations, through which tax liability falls at the individual rather than the corporate level, that failure of one shareholder to pay taxes could adversely affect all shareholders. Likewise, the respondent is concerned how the rule would be applied if a shareholder or member of the entity is convicted of a felony.

The respondent is also concerned about how this rule applies to a joint venture and teaming. First, can a corporation avoid disclosure of a felony conviction if it becomes a member of a joint venture? Second, if the joint venture is a corporate entity, are the underlying entities that make up the joint venture required to disclose tax delinquencies and felonies?

Response: No change is made. The term ``corporation'' is used throughout the FAR without definition. If a term is used in the FAR without definition, then it has the standard dictionary definition. A corporation is a legal entity that is separate and distinct from the entities that own, manage, or control it. It is organized and incorporated under the jurisdictional authority of a governmental body, such as a State or the District of Columbia. The law does not specify any particular type of corporation. The most common type of corporation in the U.S. is the subchapter C corporation--authorized under State law, and subject to tax under subchapter C of the Internal Revenue Code (IRC). Most publicly traded corporations are C corporations. The IRC and other governing statutes authorize specialized corporations including the subchapter S corporation (e.g., per the IRC and State laws), professional corporation (PC) (e.g., per State laws), and limited liability company (LLC) (e.g., per State laws).

Section 744 applies to ``any corporation that has any unpaid Federal tax liability . . .'' Section 745 applies to ``any corporation that was convicted of a felony criminal violation under any Federal law . . .'' Any corporation, including pass-through entities such as the S corporation and the LLC, may have an unpaid Federal tax liability--there are Federal tax liabilities other than corporate income tax liability. While the S corporation and LLC may not incur Federal income tax liabilities as pass-through entities, they may incur Federal employment tax liabilities under subtitle C of 26 U.S.C. for payroll tax withholdings, social security and Medicare taxes; as well as various Federal excise tax liabilities, e.g., under subtitle D of 26 U.S.C. on communications and air transportation facilities and services, coal, medical devices, group health plans, and failure to maintain minimum essential health insurance coverage; and under subtitle E of 26 U.S.C. on alcohol and tobacco, machine guns, some other firearms, and structured settlement factoring transactions.

The corporation is an artificial construct, a legally created entity that generally has the same rights and responsibilities as a natural person. Thus, the corporation is not automatically immune from being convicted of a felony criminal violation under any Federal law merely because it is an artificial entity. A corporation can commit crimes as it can be held criminally liable for the illegal act of its directors, officers, employees, agents, or shareholders under the legal doctrine of respondeat superior. A corporation cannot be jailed if convicted. Otherwise, it faces the same consequences as a natural person following conviction. Depending on the facts and circumstances, any corporation may be convicted of a felony criminal violation under any Federal law, separate and apart from any felony criminal conviction of any of its directors, officers, employees, agents, or shareholders. While the liabilities of the corporate entity are separate from the liabilities of its shareholders generally because they are separate legal entities, the shareholders may become liable for corporate liabilities under the legal doctrine of piercing the corporate veil. Under certain facts and circumstances, a court may pierce the corporate veil and ignore the legal separateness of the corporation and its shareholders, and hold the shareholders and other principals personally liable for what would otherwise be corporate liabilities.

Joint ventures and other teaming arrangements are temporary business arrangements where two or more parties agree to work together to achieve a specific task or objective, e.g., usually a new project, business activity, or a contract. A joint venture or other teaming arrangement is not necessarily a corporation--it all depends upon the legal structure and arrangement chosen for the temporary relationship formed by the members of the teaming arrangement. FAR 9.601 defines two types of teaming arrangements: Two or more companies form a partnership or joint venture entity to act as a potential prime contractor--the joint venture teaming arrangement; or a potential prime contractor agrees with one or more companies to have them act as its subcontractors under a specified Government contract or acquisition program--the prime-subcontractor teaming arrangement. In either type of teaming arrangement, the parties to the arrangement may be existing or newly created entities, or a combination thereof. With respect to the prime-subcontractor teaming arrangement, the prime contractor is subject to the rule if it is a corporation. With respect to the joint venture teaming arrangement, the joint venture can take many legal forms, including as a C corporation, LLC, or partnership. If the prime contractor(s) in the joint venture teaming arrangement is a corporation, it is subject to the rule. Conversely, if the prime contractor(s) in the joint venture teaming arrangement is(are) not a corporation, it is not subject to the rule, i.e., the legal form of the joint venture teaming arrangement will determine whether the joint venture prime contractor(s) is(are) subject to the rule. See FAR 4.102 for the signatories for the various prime contractor entity types. If the signatory for the prime contractor is a corporation, it is subject to the rule.

If the offeror or contractor is uncertain as to its legal status as a corporation, the offeror or contractor needs to consult with its legal counsel to determine whether it is a corporation subject to sections 744 and 745.

3. Finality of Felony Criminal Conviction

Comment: One respondent noted that the rule requires contractors to report assessed, unpaid Federal tax liability only when all judicial and administrative remedies have been exhausted or have lapsed. The respondent noted, however, that the rule requires a contractor to disclose conviction of a felony criminal violation under any Federal law within the preceding 24 months, but does not provide any consideration as to whether the contractor has appealed the decision and such an appeal is pending. The respondent recommends that the rule should require disclosure of convictions only after all judicial remedies have been exhausted.

Response: No change is made. The disclosure requirements of this rule are based on the statutory requirements of section 744 and 745. Section 745 applies to ``any corporation that was convicted of a felony criminal violation under any Federal law within the preceding 24 months.'' Unlike section 744 which requires the exhaustion of all judicial and administrative remedies for any unpaid Federal tax liability, the plain text of section 745 does not require the exhaustion of all judicial and administrative remedies for a felony criminal violation conviction before it is applicable.

4. Response Time for Debarring Official

Comment: One respondent is concerned that the lack of requirement for a reasonable response time for a debarring official to make a decision under this rule will likely delay the procurement process. The respondent recommends that the debarment official should be required to make a determination within five business days of receiving the inquiry from a contracting officer. According to the respondent, after the five days expires, the determination should automatically default to no suspension or debarment.

Response: No change is made. Sections 744 and 745 do not require the suspending or debarring official to issue a determination to suspend or debar a corporation in accordance with the normal suspension and debarment process (see FAR subpart 9.4). If statutory text similar to the text of these sections is in an appropriations act, the funds appropriated by such an act are prohibited from being used to award to a corporation that has delinquent Federal taxes or has been convicted of a Federal felony unless the suspending or debarring official makes a positive determination that suspension or debarment is not necessary to protect the interests of the Government.

5. Out of Scope

Comment: Two respondents recommended that because this rule has a zero tolerance for tax delinquencies, the FAR Council should remove the $3,500 threshold for reporting of tax delinquencies at FAR 9.104-5(a)(2) and paragraph (a)(1)(i)(D) of the provision at 52.209-5, Certification Regarding Responsibility Matters. The respondents also recommended expanding the certification provision at FAR 52.209-12 to include reporting of State and local tax delinquencies.

Response: These recommendations are outside the scope of this rule, which is to implement sections 744 and 745 of division E and section 523 of division B of the Consolidated and Further Continuing Resolution Appropriations Act, 2015. The certification at FAR 52.209-5(a)(1)(i)(D) with regard to delinquent Federal taxes was inserted in the FAR under FAR Case 2006-011 at the request of the Senate Permanent Subcommittee on Investigations. The certification in FAR 52.209-5 covers delinquent Federal taxes in excess of $3,500 within the past three years, is required in all solicitations when the contract value is expected to exceed the simplified acquisition threshold, and is used along with other factors in the determination of contractor responsibility. The representations in this final rule are based on an annual appropriations act funding restriction, and are required to be included in all solicitations when awards are made with such restricted appropriated funds. There is no de minimis amount of delinquent Federal taxes which does not need to be reported. These requirements are only in effect with respect to the affected appropriated funds when the funding restrictions are included in the specific annual appropriations act. The law does not restrict the award with appropriated funds to entities with regard to State and local tax delinquencies. Thus, there are no representations required as to the status of State and local tax delinquencies. 41 U.S.C. 1304, as implemented at FAR 1.107, prohibits the inclusion of non-statutory certifications unless justified in writing to the Administrator for Federal Procurement Policy.

III. Applicability to Acquisitions Not Greater Than the Simplified Acquisition Threshold and Commercial Items (Including Commercially Available Off-the-Shelf (COTS) Items)

The FAR Council and the Administrator for Federal Procurement Policy have determined that it would not be in the best interest of the Federal Government to exempt acquisitions with estimated value not greater than the simplified acquisition threshold and contracts for the acquisition of commercial items (including COTS items) from the application of these appropriations act restrictions.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

This rule implements sections 744 and 745 of Division E of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) (and similar provisions in subsequent appropriations acts) to prohibit using any of the funds made available under that or any other act to enter a contract with any corporation with any delinquent Federal tax liability or a felony conviction, unless the agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government.

The rule also implements section 523 of Division B of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) (and similar provisions in subsequent appropriations acts). This section prohibits award of any contract in an amount greater than $5,000,000, unless the offeror affirmatively certifies that it has filed all Federal tax returns required during the three years preceding the certification; has not been convicted of a criminal offense under the Internal Revenue Code of 1986; and has not, more than 90 days prior to certification, been notified of any unpaid Federal tax assessment for which the liability remains unsatisfied, unless the assessment is the subject of an installment agreement or offer in compromise that has been approved by the Internal Revenue Service and is not in default, or the assessment is the subject of a non-frivolous administrative or judicial proceeding.

DoD, GSA, and NASA published an interim rule in the Federal Register at 80 FR 75903 on December 4, 2015, to implement sections 744 and 745 of Division E of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and section 523 of Division B of the same act. Three respondents submitted comments on the interim rule. No comments were received from the public relative to the initial regulatory flexibility analysis.

Based on current data with regard to active registrants in the System for Award Management (SAM), the rule will apply to approximately 65,000 small business concerns, which are required to complete the annual representations and certifications at least once per year in order to keep their registration in SAM current.

The information collection requirement imposed by this rule is minimal--a brief representation, and in some cases also a certification, each estimated to require an average of 6 minutes to complete.

DoD, GSA, and NASA were unable to identify any significant alternatives that would reduce the impact on small businesses and still meet the objectives of the statute. However, other than the potential for not receiving award if the small entity is delinquent in payment of Federal taxes or has been convicted of a felony, there is no significant economic impact on small entities because the information collection burden imposed by the rule is minimal.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

VI. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The rule contains information collection requirements. OMB has cleared this information collection requirement under OMB Control Number 9000-0193, titled: Prohibition on Contracting with Corporations with Delinquent Taxes or a Felony Conviction.

List of Subjects in 48 CFR Parts 1, 4, 9, 12, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR parts 1, 4, 9, 12, and 52, which published in the Federal Register at 80 FR 75903 on December 4, 2015, is adopted as a final rule without change.

[FR Doc. 2016-23194 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23195]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 22, and 52

[FAC 2005-91; FAR Case 2015-036; Item II; Docket No. 2015-0036, Sequence No. 1]

RIN 9000-AN14

Federal Acquisition Regulation; Updating Federal Contractor Reporting of Veterans' Employment

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are adopting as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement a final rule issued by the Department of Labor's (DOL) Veterans' Employment and Training Service (VETS) that replaced the VETS-100 and VETS-100A Federal Contractor Veterans' Employment Report forms with the VETS-4212, Federal Contractor Veterans' Employment Report form.

DATES: Effective: September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement Analyst, at 202-969-7207 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2015-036.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 80 FR 75908 on December 4, 2015, to implement a final rule issued by VETS of the DOL that was published in the Federal Register at 79 FR 57463 on September 25, 2014. The VETS of DOL rule rescinded the regulations at 41 CFR part 61-250 and revised the regulations at 41 CFR part 61-300, which implemented the reporting requirements under the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), as amended and the Jobs for Veterans Act (JVA) (Pub. L. 107-288). VEVRAA requires Federal contractors and subcontractors to annually report on the total number of their employees who belong to the categories of veterans protected under VEVRAA, as amended by the JVA, and the total number of those protected veterans who were hired during the period covered by the report. No public comments were submitted on the interim rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) did not receive any comments on the interim rule; accordingly the Councils are finalizing the interim rule without change.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

This rule is issued to adopt as final, without change, an interim rule published in the Federal Register at 80 FR 75908 on December 4, 2015, implementing changes to 41 CFR 61-250 and 61-300 which was published in the Federal Register at 79 FR 57463 on September 25, 2014, by the Veterans' Employment and Training Service (VETS) of the Department of Labor (DOL). The objective of the VETS rule is to revise the current regulations implementing 38 U.S.C. 4212. The VETS rule rescinded obsolete regulations at 41 CFR 61-250, changed the manner in which Federal Contractors report veterans' employment data, updated terminology, and revised the annual report, the report name, and methods of filing the report.

No public comments were submitted in response to the initial regulatory flexibility analysis or the interim rule.

VETS used data in the VETS-100/100A Reporting System regarding reports on veterans' employment filed in 2012 to estimate the number of small entities that would be subject to its rule. The VETS rule applies to any industry represented by a Federal contractor with a contract of $150,000 or more. Therefore, VETS used the Small Business Administration's ``fewer than 500 employees'' limit when making an across-the-board size standard classification for estimating purposes. VETS estimated that 15,000 Federal contractors will be subject to the reporting requirements of the rule and of that, VETS approximated that the number of small entities that would be subject to the rule would be 8,000 (approximately 53 percent of the total Federal contractors impacted by the rule).

This FAR rule does not add any new reporting, recordkeeping, or other compliance burdens. The FAR rule makes contracting officers and contractors aware of the VETS reporting requirements.

DoD, GSA, and NASA are not aware of any significant alternatives to the rule which would accomplish the stated objectives of implementing the VETS final rule, while minimizing impact on small entities. DoD, GSA, and NASA do not have the flexibility of making any changes to the VETS rule, which has already been published for public comment and has taken effect as a final rule. There is no significant impact on small entities imposed by the FAR rule.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C chapter 35) applies. The rule contains information collection requirements that are subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq. However, the applicable information collections are derived from the requirements of the 41 CFR part 61-300 regulations implementing the reporting requirements under VEVRAA; see detailed discussion in DOL's rule under the Paperwork Reduction Act section which was published in the Federal Register at 79 FR 57463 on September 25, 2014. OMB assigned OMB Control Numbers 1250-0004, OFCCP Recordkeeping and Reporting Requirements, 38 U.S.C. 4212, Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, and 1293-0005, Federal Contractor Veterans' Employment Report.

List of Subjects in 48 CFR Parts 1, 22, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR parts 1, 22, and 52, which was published in the Federal Register at 80 FR 75908 on December 4, 2015, is adopted as a final rule without change.

[FR Doc. 2016-23195 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23196]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 22, and 52

[FAC 2005-91; FAR Case 2016-007; Item III; Docket No. 2016-0007; Sequence No. 1]

RIN 9000-AN10

Federal Acquisition Regulation: Non-Retaliation for Disclosure of Compensation Information

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement Executive Order (E.O.), entitled ``Non-Retaliation for Disclosure of Compensation Information,'' and a final rule issued by the Department of Labor.

DATES: Effective: September 30, 2016.

Applicability Date: This rule applies to solicitations and contracts issued on or after the effective date of the FAR rule. Contracting officers are expected to work with their existing contractors and bilaterally modify their contracts, to the extent feasible, to include the amended clause at FAR 52.222-26, Equal Opportunity. See FAR 1.108(d).

Comment Date: Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown below on or before November 29, 2016 to be considered in the formation of the final rule.

ADDRESSES: Submit comments identified by FAC 2005-91, FAR Case 2016-007, by any of the following methods:

Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ``FAR Case 2016-007''. Select the link ``Comment Now'' that corresponds with ``FAR Case 2016-007''. Follow the instructions provided on the screen. Please include your name, company name (if any), and ``FAR Case 2016-007'' on your attached document.

Mail: General Services Administration, Regulatory

Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405-0001.

Instructions: Please submit comments only and cite ``FAR Case 2016-007'' in all correspondence related to this case. Comments received generally will be posted without change to http://regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement Analyst, at 202-969-7207 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2016-007.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA are issuing an interim rule amending the FAR to implement Executive Order (E.O.) 13665, entitled ``Non-Retaliation for Disclosure of Compensation Information.'' The E.O. was signed April 8, 2014, and was published in the Federal Register at 79 FR 20749, on April 11, 2014. This interim rule is also implementing the final rule issued by the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor (DOL) to implement E.O. 13665. The DOL final rule was published in the Federal Register at 80 FR 54934, on September 11, 2015, entitled ``Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions.'' The DOL rule revises 41 CFR part 60-1.

E.O. 11246, originally issued September 24, 1965, establishes nondiscrimination and affirmative action obligations in employment for Federal contractors and subcontractors. It prohibits employment discrimination because of race, color, religion, sex, sexual orientation, gender identity, or national origin. E.O. 13665 amends E.O. 11246 to provide for a uniform policy for the Federal Government to prohibit Federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants. Also, the E.O. indicates that it promotes economy and efficiency in Federal Government procurement and supports enforcement of nondiscrimination and equal employment opportunity.

II. Discussion and Analysis

A. The DOL regulation implements E.O. 13665 by revising the equal opportunity clause to prohibit contractors from discharging, or in any manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.

B. The FAR implements E.O. 11246 in FAR subpart 22.8, FAR clause 52.222-26, Equal Opportunity, and related clauses. This interim rule adds the new discrimination prohibition and incorporates the definitions ``compensation,'' ``compensation information,'' and ``essential job functions'' from the DOL final rule (41 CFR 60-1.3) within FAR subpart 22.8 and the clauses that are prescribed in FAR subpart 22.8 as follows:

1. 22.802, General. Inserts the new discrimination prohibition.

2. 52.222-26, Equal Opportunity. Inserts definitions for the terms ``compensation,'' ``compensation information,'' and ``essential job functions,'' and 52.222-26(c)(5), which prohibits contractors from discharging, or in any manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. FAR 52.222-26(c)(5) also requires the contractor to incorporate the new discrimination prohibition into existing employee manuals or handbooks and to post it.

C. Conforming changes were made in the FAR clauses 52.212-5, 52.213-4, and 52.244-6.

III. Executive Orders 12866 and 13563

E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This interim rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA do not expect this interim rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. However, an initial regulatory flexibility analysis (IRFA) has been prepared consistent with 5 U.S.C. 603. The analysis is summarized as follows:

This interim rule is necessary to implement E.O. 13665, Non-Retaliation for Disclosure of Compensation Information (amending E.O. 11246, Equal Opportunity in Federal Employment) as implemented by the final rule issued by the DoL at 41 CFR part 60-1, published in the Federal Register at 80 FR 54934, on September 11, 2015.

The objective of this rule is to provide for a uniform policy for the Federal Government to prohibit Federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants.

The rule will apply to all entities, both small and other than small. Based on the most current data available in the System for Award Management (SAM), there are 328,552 small contractor firms with fewer than 500 employees and 315,902 small contractor firms with less than $35.5 million in revenue. Thus, the total number of small contractor firms that may be impacted by the rule range from 315,902 to 328,552.

Recordkeeping and reporting requirements of the rule involve regulatory familiarization and administrative costs associated with incorporating revised language into policies, instructions, notices to employees, and subcontracts. In implementing the additional prohibition, the rule requires that contractors and subcontractors disseminate the nondiscrimination provision, using language prescribed by the Director of the Office of Federal Contract Compliance Programs (OFCCP), including incorporating the nondiscrimination provision into existing employee manuals and handbooks and posting it electronically or in conspicuous places available to employees and applicants. An analysis of estimated costs of the regulatory changes was performed in the DOL final rule published in the Federal Register at 80 FR 54934, on September 11, 2015. DoL estimated the total cost of their final rule at $85.00 per company.

The rule does not duplicate, overlap, or conflict with any other Federal rules.

DoD, GSA, and NASA are not aware of any significant alternatives to the rule that would accomplish the stated objectives of the E.O. and the DOL implementing regulations.

It is necessary for the rule to apply to small entities, because E.O. 11246, as amended, applies when a contractor has contracts or subcontracts with the Government in any 12-month period which have an aggregate total value (or can reasonably be expected to have an aggregate total value) exceeding $10,000 that are not completely exempted. Every effort has been made to minimize the burdens imposed on small entities.

The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 610 (FAR Case 2016-007), in correspondence.

V. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C chapter 35) does apply; however, the information collection authorization is under the DOL final rule issued by the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor (DOL), which was published in the Federal Register at 80 FR 54934, on September 11, 2015, entitled ``Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions,'' and is assigned OMB Control Number 1250-0008, Prohibitions Against Pay Secrecy Policies and Actions. This information collection expires December 31, 2018. The other information collection requirements cited at 1.106 that apply to FAR clause 52.225-26, assigned OMB control numbers 1250-0001 and 1250-0003, cover the general recordkeeping provisions of the laws administered by OFCCP.

VI. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. It is important that the FAR is immediately revised to include the requirements of E.O. 13665, entitled ``Non-Retaliation for Disclosure of Compensation Information'' and the Department of Labor implementing regulation published in the Federal Register at 80 FR 54934, on September 11, 2015 that requires the Federal Government to establish a uniform policy that prohibits Federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants. This action is necessary because DOL's final rule became effective on January 11, 2016, and section 6 of the E.O. expressly states that the order ``shall apply to contracts entered into on or after the effective date of rules promulgated by the Department of Labor.'' Issuance of an interim rule allows for the requirements to be included in solicitations and contracts immediately and puts contractors on clear notice of legal responsibilities that are already in effect. If the FAR rule is not issued as an interim rule, this new requirement will not be incorporated into contracts, and contractors will be put at unnecessary risk of non-compliance with the E.O. and labor rule. More importantly, this may unnecessarily delay action by contractors in providing the important protections for contractor employees that the E.O. and labor rule are designed to provide. However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 1, 22, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 22, and 52 as set forth below:

1. The authority citation for 48 CFR parts 1, 22, and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

2. Amend section 1.106 in the table by removing from FAR segment ``52.222-26'' the OMB control number ``1250-0003'' and adding ``1250-0001, 1250-0003, and 1250-0008'' in its place.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

3. Amend section 22.802 by revising paragraph (a) to read as follows:

22.802 General.

(a) Executive Order 11246, as amended, sets forth the Equal Opportunity clause and requires that all agencies--

(1) Include this clause in all nonexempt contracts and subcontracts (see 22.807); and

(2) Act to ensure compliance with the clause and the regulations of the Secretary of Labor--

(i) To promote the full realization of equal employment opportunity for all persons, regardless of race, color, religion, sex, sexual orientation, gender identity, or national origin; and

(ii) To prohibit contractors from discharging, or in any other manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

* * * * *

4. Amend section 22.809 by revising the introductory text to read as follows:

22.809 Enforcement.

Upon written notification to the contracting officer, the Deputy Assistant Secretary may direct one or more of the following actions, as well as administrative sanctions and penalties, be taken against contractors found to be in violation of E.O. 11246, the regulations of the Secretary of Labor, or the applicable contract clauses:

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

5. Amend section 52.212-5 by--

a. Revising the date of the clause and paragraphs (b)(28) and (e)(1)(v); and

b. In Alternate II, revising the date of the alternate and paragraph (e)(1)(ii)(E).

The revisions read as follows:

52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items (Sept 2016)

* * * * *

(b) * * *

__(28) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).

* * * * *

(e)(1) * * *

(v) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).

* * * * *

Alternate II (Sept 2016). * * *

* * * * *

(e)(1) * * *

(ii) * * *

(E) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).

* * * * *

6. Amend section 52.213-4 by revising the date of the clause and paragraphs (a)(1)(iii) and (a)(2)(viii) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items).

* * * * *

Terms and Conditions-Simplified Acquisitions (Other than Commercial Items) (Sept 2016)

(a) * * *

(1) * * *

(iii) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).

* * * * *

(2) * * *

(viii) 52.244-6, Subcontracts for Commercial Items (Sept 2016).

* * * * *

7. Amend section 52.222-26 by--

a. Revising the date of the clause;

b. Adding to paragraph (a), in alphabetical order, the definitions ``Compensation'', ``Compensation information'', and ``Essential job functions'';

c. Redesignating paragraphs (c)(5) through (11) as paragraphs (c)(6) through (12), respectively;

d. Adding new paragraph (c)(5);

e. Removing from newly designated paragraph (c)(12) ``contracting officer'' and adding ``Director of OFCCP'' in its place; and

f. Removing from paragraph (d) ``41 CFR 60-1.1.'' and adding ``41 CFR part 60-1.'' in its place.

The revision and additions read as follows:

52.222-26 Equal Opportunity.

* * * * *

Equal Opportunity (Sept 2016)

(a) * * *

Compensation means any payments made to, or on behalf of, an employee or offered to an applicant as remuneration for employment, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and retirement.

Compensation information means the amount and type of compensation provided to employees or offered to applicants, including, but not limited to, the desire of the Contractor to attract and retain a particular employee for the value the employee is perceived to add to the Contractor's profit or productivity; the availability of employees with like skills in the marketplace; market research about the worth of similar jobs in the relevant marketplace; job analysis, descriptions, and evaluations; salary and pay structures; salary surveys; labor union agreements; and Contractor decisions, statements and policies related to setting or altering employee compensation.

Essential job functions means the fundamental job duties of the employment position an individual holds. A job function may be considered essential if--

(1) The access to compensation information is necessary in order to perform that function or another routinely assigned business task; or

(2) The function or duties of the position include protecting and maintaining the privacy of employee personnel records, including compensation information.

* * * * *

(c) * * *

(5)(i) The Contractor shall not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the Contractor's legal duty to furnish information.

(ii) The Contractor shall disseminate the prohibition on discrimination in paragraph (c)(5)(i) of this clause, using language prescribed by the Director of the Office of Federal Contract Compliance Programs (OFCCP), to employees and applicants by--

(A) Incorporation into existing employee manuals or handbooks; and

(B) Electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment.

* * * * *

8. Amend section 52.244-6 by revising the date of the clause and paragraph (c)(1)(vi) to read as follows:

52.244-6 Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Sept 2016)

* * * * *

(c)(1) * * *

(vi) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).

* * * * *

[FR Doc. 2016-23196 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23197]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 6, 18, 19, and 52

[FAC 2005-91; FAR Case 2015-032; Item IV; Docket No. 2015-0032; Sequence No. 1]

RIN 9000-AN13

Federal Acquisition Regulation; Sole Source Contracts for Women-Owned Small Businesses

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA have adopted as final, with a minor edit, an interim rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA) that provide for authority to award sole source contracts to economically disadvantaged women-owned small business concerns and to women-owned small business concerns eligible under the Women-Owned Small Business (WOSB) Program.

DATES: Effective: September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Mahruba Uddowla, Procurement Analyst, at 703-605-2868 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2015-032.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 80 FR 81888 on December 31, 2015, to implement regulatory changes that the SBA has made in its final rule published in the Federal Register at 80 FR 55019, on September 14, 2015, concerning sole source award authority under the WOSB Program. SBA's final rule implements the statutory requirements of paragraph (a)(3) of section 825 of the Carl Levin and Howard P. ``Buck'' McKeon National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2015, Public Law 113-291, granting contracting officers the authority to award sole source contracts to economically disadvantaged women-owned small business (EDWOSB) concerns and to WOSB concerns eligible under the WOSB Program.

Four respondents submitted comments on the interim rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. All four respondents expressed support of the interim rule. Therefore, no further change to the interim rule is required as a result of the public comments, but there is a minor edit to 19.1505(a)(1).

III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items

This rule adopts as final the amendments to the FAR clauses at 52.219-29, Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-owned Small Business Concerns, and 52.219-30, Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program, in order to implement paragraph (a)(3) of section 825 of the NDAA for FY 2015. The Federal Acquisition Regulatory Council, pursuant to the authority granted in 41 U.S.C. 1905 and 1906, and the Administrator, Office of Federal Procurement Policy, pursuant to the authority granted in 41 U.S.C 1907, have determined that the application of this statutory authority to contracts at or below the simplified acquisition threshold and to contracts for commercial items and commercially available off-the-shelf items, is in the best interests of the Federal Government.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

This rule implements paragraph (a)(3) of section 825 of the Carl Levin and Howard P. `Buck' McKeon National Defense Authorization Act for Fiscal Year 2015, Public Law 113-291, (Fiscal Year 2015 NDAA). Section 825 of the Fiscal Year 2015 NDAA included language granting contracting officers the authority to award sole source contracts to Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) under the WOSB Program. The purpose of this rule is to finalize the procedures whereby Federal agencies may award sole source contracts to WOSBs and EDWOSBs eligible under the WOSB Program. The rule provides an additional tool for Federal agencies to ensure that WOSBs have an equal opportunity to participate in Federal contracting and ensures consistency among SBA's socioeconomic small business contracting programs.

The interim rule, published at 80 FR 81888, on December 31, 2015, put the WOSB Program on a level playing field with other SBA Government contracting programs with sole source authority and provided an additional, needed tool for agencies to meet the statutorily mandated goal of 5 percent of the total value of all prime contract and subcontract awards for WOSBs.

There were no significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis provided in the interim rule.

This rule may have a positive economic impact on WOSB concerns. The Dynamic Small Business Supplemental Search (DSBS) lists approximately 41,500 firms as either WOSBs or EDWOSBs under the WOSB Program. An analysis of the Federal Procurement Data System from April 1, 2011 (the implementation date of the WOSB Program), through September 1, 2015, revealed that there were approximately 17,353 women-owned small business concerns that received obligated funds from Federal contract awards, task or delivery orders, and modifications to existing contracts, in an industry where a WOSB or EDWOSB sole source is authorized, and where the contract is valued at or below the thresholds for sole source contracts to WOSBs or EDWOSBs. Of those 17,353 women-owned small business concerns, 328 EDWOSBs and 974 WOSBs were eligible to participate in the WOSB Program (i.e., received set-asides under the WOSB Program), and could have received sole source awards. This rule could affect a smaller number of EDWOSBs and WOSBs than those eligible under the WOSB Program since the sole source authority can only be used where a contracting officer conducts market research in an industry where a WOSB or EDWOSB set-aside is authorized, and cannot identify two or more eligible EDWOSB or WOSB concerns that can perform at a fair and reasonable price, but identifies one WOSB or EDWOSB that can perform. In addition, the sole source authority for WOSBs and EDWOSBs is limited to contracts valued at $6.5 million or less for manufacturing contracts and $4 million or less for all other contracts.

This rule does not impose any new reporting, recordkeeping or other compliance requirements for small businesses. This rule does not duplicate, overlap, or conflict with any other Federal rules.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat Division. The Regulatory Secretariat Division has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

VI. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 2, 4, 6, 18, 19, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Interim Rule Adopted as Final With Change Accordingly, the interim rule amending 48 CFR parts 2, 4, 6, 18, 19, and 52 which was published in the Federal Register at 80 FR 81888, on December 31, 2015, is adopted as a final rule with the following change:

PART 19--SMALL BUSINESS PROGRAMS

1. The authority citation for 48 CFR part 19 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

19.1505 [Amended]

2. Amend section 19.1505 by removing from paragraph (a)(1) ``Program.'' and adding ``Program; and'' in its place.

[FR Doc. 2016-23197 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23198]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 9, 12, 19, 52, and 53

[FAC 2005-91; FAR Case 2015-022; Item V; Docket No. 2015-0022, Sequence No. 1]

RIN 9000-AN00

Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal Awards

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to redesignate the terminology for unique identification of entities receiving Federal awards. The change to the FAR removes the proprietary standard or number.

DATES: Effective: October 31, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement Analyst, at 202-969-7207 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2015-022.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 80 FR 72035 on November 18, 2015, to redesignate the terminology for unique identification of entities receiving Federal awards. The change to the FAR eliminates references to the proprietary Data Universal Numbering System (DUNS[supreg]) number, and provides appropriate references to the Web site where information on the unique entity identifier used for Federal contractors will be located. This final rule also establishes definitions of ``unique entity identifier'', and ``electronic funds transfer (EFT) indicator''. Ten respondents submitted comments on the proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. All ten respondents agreed with the rule. No changes were made to the rule as a result of those comments. A discussion of the comments is provided as follows:

A. Analysis of Public Comments

1. Alternatives to and Considerations for the Evaluation of a Nonproprietary Entity Identifier

Comment: Six respondents provided an alternative to the current entity identifier (e.g., Legal Entity Identifier (LEI), Contractor and Government Entity (CAGE) code) and four respondents provided additional considerations for the evaluation of alternatives for the entity identifier.

Response: The scope of this rule is limited to removing the proprietary standard or number. The Office of Management and Budget (OMB) and the Department of Treasury, in collaboration with the General Services Administration and the Award Committee for E-Government, are establishing a process for considering alternatives to existing entity identifiers, including soliciting information about viable options from and reaching out about nonproprietary alternatives to all sectors, including private companies, nonprofits, and Federal Government providers. The analysis of the alternatives for the entity identifier and the analysis of considerations for the evaluation of alternatives for the entity identifier are beyond the scope of the case. However, the FAR Council will share these recommendations with the agencies conducting the analysis and implementing the changes.

2. Challenges to Statements Made in the Proposed Rule Federal Register Preamble

Comment: One respondent believed that the statement that the ``current requirement limits competition by using a proprietary number and organization to meet the identification need as well as the need for other business information associated with that number'' incorrectly suggests that the business information is only accessible through usage of the DUNS number. This respondent also challenged the assertion that the Government is not currently in a position to move away from use of the DUNS number in the short term. This respondent recommended that Government agencies consider expanding their acquisitions of business information services through competitive procurements.

Response: There is nothing in the FAR linking business information services to the use of the DUNS number. Agencies are free to procure business information services as deemed appropriate. Regarding the short term ability of the Government to move away from the use of the DUNS number, the Government is in the process of determining requirements. The unique entity identifier provides multiple pieces of business information and serves multiple functions. Analysis will be conducted to ensure the replacement satisfies the full range of information needed. The Government is establishing a process for considering alternatives to existing entity identifiers, including soliciting information about viable options from and reaching out about nonproprietary alternatives to all sectors, including private companies, nonprofits, and Federal government providers. The analysis of alternatives is anticipated to be completed in fiscal year 2017. The scope of this rule is limited to removing the proprietary standard or number hence removing the impediment in anticipation of the change. The Government is interested in reducing cost and that is the reason we are pursuing this case. Recommendations regarding business information services are beyond the scope of the case.

B. Other Changes

Conforming changes were made to the following forms: Standard Forms 294, 330, and 1447, and Optional Form 307. These form changes will be made to be ``Previous Edition Usable'' in order to avoid Government agencies and Federal contractors having to make unnecessary system changes to accommodate nonsubstantive changes to forms.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows: The rule removes a proprietary standard or number for the unique identification of entities receiving Federal awards. The current requirement limits competition by using a proprietary number and organization to meet the identification needs.

Unique identification of such entities is critical to ensure Federal dollars are awarded to responsible parties, awardees are paid in a timely manner, and awards are appropriately recorded and reported. This is currently accomplished in the FAR by using the proprietary Data Universal Numbering System (DUNS[supreg]) number from Dun and Bradstreet. This rule eliminates references to the proprietary standard or number, and provides appropriate references to the Web site where information on the unique entity identifier used for Federal contractors will be designated. Although the Government does not intend to move away from use of the DUNS number in the short term, elimination of regulatory references to a proprietary entity identifier will provide opportunities for future competition that can reduce costs to taxpayers.

No public comments were submitted in response to the initial regulatory flexibility analysis.

The final rule is internal to the Government and does not directly impose any requirements on the vendor community. However, the rule may affect certain entities if those entities have arranged certain of their business systems to utilize, accept, or otherwise recognize the existing unique identifier (DUNS number) and should that unique identifier be changed at some point to another identifier. As of June 2015, there were 380,092 unique and active DUNS numbers designated in the System for Award Management and attributed to Government contracting.

There is no change to recordkeeping as a result of this rule.

There are no known significant alternative approaches to the rule that would meet the requirements.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 2, 4, 9, 12, 19, 52, and 53

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 9, 12, 19, 52, and 53 as set forth below:

1. The authority citation for 48 CFR parts 2, 4, 9, 12, 19, 52, and 53 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 2--DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101, in paragraph (b)(2) by--

a. Removing the definitions ``Data Universal Numbering System (DUNS) number'' and ``Data Universal Numbering System +4 (DUNS+4) number'';

b. Adding, in alphabetical order, the definition ``Electronic Funds Transfer (EFT) indicator'';

c. Revising paragraph (1) of the definition ``Registered in the System for Award Management (SAM) database''; and

d. Adding, in alphabetical order, the definition, ``Unique entity identifier''.

The revisions and additions read as follows:

2.101 Definitions.

* * * * *

(b) * * *

(2) * * *

Electronic Funds Transfer (EFT) indicator means a four-character suffix to the unique entity identifier. The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for Award Management records for identifying alternative EFT accounts (see subpart 32.11) for the same entity.

* * * * *

Registered in the System for Award Management (SAM) database * * *

(1) The Contractor has entered all mandatory information, including the unique entity identifier and the Electronic Funds Transfer indicator (if applicable), the Commercial and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14), into the SAM database;

* * * * *

Unique entity identifier means a number or other identifier used to identify a specific commercial, nonprofit, or Government entity. See www.sam.gov for the designated entity for establishing unique entity identifiers.

* * * * *

PART 4--ADMINISTRATIVE MATTERS

3. Amend section 4.601 by removing the definition ``Generic DUNS number'' and adding, in alphabetical order, the definition ``Generic entity identifier'' to read as follows:

4.601 Definitions.

* * * * *

Generic entity identifier means a number or other identifier assigned to a category of vendors and not specific to any individual or entity.

* * * * *

4. Amend section 4.605 by revising paragraph (b), the heading of paragraph (c), and paragraphs (c)(1) and (2) introductory text; and removing from paragraph (c)(2)(i)(C) ``DUNS number'' and adding ``unique entity identifier'' in its place.

The revisions read as follows:

4.605 Procedures.

* * * * *

(b) Unique entity identifier. The contracting officer shall identify and report a unique entity identifier for the successful offeror on a contract action. The unique entity identifier shall correspond to the successful offeror's name and address as stated in the offer and resultant contract, and as registered in the System for Award Management database in accordance with the provision at 52.204-7, System for Award Management. The contracting officer shall ask the offeror to provide its unique entity identifier by using either the provision at 52.204-6, Unique Entity Identifier, the provision at 52.204-7, System for Award Management, or the provision at 52.212-1, Instructions to Offerors--Commercial Items. (For a discussion of the Commercial and Government Entity (CAGE) Code, which is a different identifier, see subpart 4.18.)

(c) Generic entity identifier. (1) The use of a generic entity identifier should be limited, and only used in the situations described in paragraph (c)(2) of this section. Use of a generic entity identifier does not supersede the requirements of provisions 52.204-6, Unique Entity Identifier or 52.204-7, System for Award Management (if present in the solicitation) for the contractor to have a unique entity identifier assigned.

(2) Authorized generic entity identifiers, maintained by the Integrated Award Environment (IAE) program office (http://www.gsa.gov/portal/content/105036), may be used to report contracts in lieu of the contractor's actual unique entity identifier only for--

* * * * *

5. Amend section 4.607 by--

a. Removing from paragraph (b) ``Data Universal Numbering System Number'' and adding ``Unique Entity Identifier'' in its place; and

b. Revising paragraph (c) to read as follows.

4.607 Solicitation provisions and contract clause.

* * * * *

(c) Insert the clause at 52.204-12, Unique Entity Identifier Maintenance, in solicitations and resulting contracts that contain the provision at 52.204-6, Unique Entity Identifier.

6. Amend section 4.1103 by--

a. Removing from paragraph (a)(1) ``must register;'' and adding ``shall register;'' in its place;

b. Removing from the introductory text of paragraph (a)(2) ``DUNS number or, if applicable, the DUNS+4 number,'' and adding ``unique entity identifier'' in its place;

c. Adding to the end of paragraph (a)(2)(i) ``or''; and

d. Revising paragraphs (a)(3) and (d) to read as follows:

4.1103 Procedures.

(a) * * *

(3) Need not verify registration before placing an order or call if the contract or agreement includes the provision at 52.204-7, System for Award Management, or the clause at 52.212-4, Contract Terms and Conditions--Commercial Items, or a similar agency clause, except when use of the Governmentwide commercial purchase card is contemplated as a method of payment. (See 32.1108(b)(2)).

* * * * *

(d) The contracting officer shall, on contractual documents transmitted to the payment office, provide the unique entity identifier and, if applicable, the Electronic Funds Transfer indicator, in accordance with agency procedures.

4.1402 [Amended]

7. Amend section 4.1402 by removing from paragraph (b), last sentence, ``DUNS number'' and adding ``entity identifier'' in its place.

4.1705 [Amended]

8. Amend section 4.1705 by removing from paragraphs (a) and (b) ``DUNS number'' and adding ``entity identifier'' in their places.

9. Amend section 4.1800 by revising paragraph (b) to read as follows.

4.1800 Scope of subpart.

* * * * *

(b) For information on the unique entity identifier, which is a different identifier, see 4.605 and the provisions at 52.204-6, Unique Entity Identifier, and 52.204-7, System for Award Management.

10. Amend section 4.1802 by revising paragraph (a)(1) and removing from paragraph (b) ``DUNS Number'' and adding ``unique entity identifier'' in its place.

The revision reads as follows:

4.1802 Policy.

(a) * * * (1) Offerors shall provide the contracting officer the CAGE code assigned to that offeror's location prior to the award of a contract action above the micro-purchase threshold, when there is a requirement to be registered in the System for Award Management (SAM) or a requirement to have a unique entity identifier in the solicitation.

* * * * *

4.1804 [Amended]

11. Amend section 4.1804 by removing from paragraph (a)(1) ``Data Universal Numbering System Number'' and adding ``Unique Entity Identifier'' in its place.

PART 9--CONTRACTOR QUALIFICATIONS

9.404 [Amended]

12. Amend section 9.404 by revising paragraph (b)(6) to read as follows:

9.404 System for Award Management Exclusions.

* * * * *

(b) * * *

(6) Unique Entity Identifier;

* * * * *

PART 12--ACQUISITION OF COMMERCIAL ITEMS

12.301 [Amended]

13. Amend section 12.301 by removing from paragraphs (d)(1) and (2) ``DUNS Number'' and adding ``unique entity identifier'' in their places.

PART 19--SMALL BUSINESS PROGRAMS

19.704 [Amended]

14. Amend section 19.704 by removing from paragraphs (a)(10)(v) and (vi) ``DUNS number'' and adding ``unique entity identifier'' in their places.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

15. Revise section 52.204-6 to read as follows.

52.204-6 Unique Entity Identifier.

As prescribed in 4.607(b), insert the following provision:

Unique Entity Identifier (Oct 2016)

(a) Definitions. As used in this provision--

Electronic Funds Transfer (EFT) indicator means a four-character suffix to the unique entity identifier. The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for Award Management records for identifying alternative EFT accounts (see subpart 32.11) for the same entity.

Unique entity identifier means a number or other identifier used to identify a specific commercial, nonprofit, or Government entity. See www.sam.gov for the designated entity for establishing unique entity identifiers.

(b) The Offeror shall enter, in the block with its name and address on the cover page of its offer, the annotation ``Unique Entity Identifier'' followed by the unique entity identifier that identifies the Offeror's name and address exactly as stated in the offer. The Offeror also shall enter its EFT indicator, if applicable.

(c) If the Offeror does not have a unique entity identifier, it should contact the entity designated at www.sam.gov for establishment of the unique entity identifier directly to obtain one. The Offeror should be prepared to provide the following information:

(1) Company legal business name.

(2) Tradestyle, doing business, or other name by which your entity is commonly recognized.

(3) Company physical street address, city, state and Zip Code.

(4) Company mailing address, city, state and Zip Code (if separate from physical).

(5) Company telephone number.

(6) Date the company was started.

(7) Number of employees at your location.

(8) Chief executive officer/key manager.

(9) Line of business (industry).

(10) Company headquarters name and address (reporting relationship within your entity).

(End of provision)

16. Amend section 52.204-7 by--

a. Revising the provision heading and the date of the provision;

b. Amending paragraph (a) by--

1. Removing the definitions ``Data Universal Numbering System (DUNS) number'' and ``Data Universal Numbering System +4 (DUNS+4) number'';

2. Adding, in alphabetical order, the definition ``Electronic Funds Transfer (EFT) indicator'';

3. Revising paragraph (1) of the definition ``Registered in the System for Award Management (SAM) database''; and

4. Adding, in alphabetical order, the definition ``Unique entity identifier'';

c. Removing from paragraph (b)(1) ``the offeror'' and adding ``the Offeror'' in its place; and

d. Revising paragraphs (b)(2) and (c).

The revisions and additions read as follows:

52.204-7 System for Award Management.

* * * * *

System for Award Management (Oct 2016)

(a) Definitions. As used in this provision--

* * * * *

Electronic Funds Transfer (EFT) indicator means a four-character suffix to the unique entity identifier. The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for Award Management records for identifying alternative EFT accounts (see subpart 32.11) for the same entity.

Registered in the System for Award Management (SAM) database means that--

(1) The Offeror has entered all mandatory information, including the unique entity identifier and the EFT indicator, if applicable, the Commercial and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14) into the SAM database;

* * * * *

Unique entity identifier means a number or other identifier used to identify a specific commercial, nonprofit, or Government entity. See www.sam.gov for the designated entity for establishing unique entity identifiers.

(b) * * *

(2) The Offeror shall enter, in the block with its name and address on the cover page of its offer, the annotation ``Unique Entity Identifier'' followed by the unique entity identifier that identifies the Offeror's name and address exactly as stated in the offer. The Offeror also shall enter its EFT indicator, if applicable. The unique entity identifier will be used by the Contracting Officer to verify that the Offeror is registered in the SAM database.

(c) If the Offeror does not have a unique entity identifier, it should contact the entity designated at www.sam.gov for establishment of the unique entity identifier directly to obtain one. The Offeror should be prepared to provide the following information:

(1) Company legal business name.

(2) Tradestyle, doing business, or other name by which your entity is commonly recognized.

(3) Company physical street address, city, state, and Zip Code.

(4) Company mailing address, city, state and Zip Code (if separate from physical).

(5) Company telephone number.

(6) Date the company was started.

(7) Number of employees at your location.

(8) Chief executive officer/key manager.

(9) Line of business (industry).

(10) Company headquarters name and address (reporting relationship within your entity).

* * * * *

17. Amend section 52.204-10 by--

a. Revising the date of the clause; and

b. Removing from paragraph (d)(2)(i) ``identifier (DUNS Number)'' and adding ``entity identifier'' in its place.

The revision reads as follows:

52.204-10 Reporting Executive Compensation and First-Tier Subcontract Awards.

* * * * *

Reporting Executive Compensation and First-Tier Subcontract Awards (Oct 2016)

* * * * *

18. Revise section 52.204-12 to read as follows:

52.204-12 Unique Entity Identifier Maintenance.

As prescribed in 4.607(c), insert the following clause:

Unique Entity Identifier Maintenance (Oct 2016)

(a) Definition. Unique entity identifier, as used in this clause, means a number or other identifier used to identify a specific commercial, nonprofit, or Government entity. See www.sam.gov for the designated entity for establishing unique entity identifiers.

(b) The Contractor shall ensure that the unique entity identifier is maintained with the entity designated at the System for Award Management (SAM) for establishment of the unique entity identifier throughout the life of the contract. The Contractor shall communicate any change to the unique entity identifier to the

Contracting Officer within 30 days after the change, so an appropriate modification can be issued to update the data on the contract. A change in the unique entity identifier does not necessarily require a novation be accomplished.

(End of clause)

19. Amend section 52.204-13 by--

a. Revising the date of the clause;

b. Amending paragraph (a) by--

1. Removing the definitions ``Data Universal Numbering System (DUNS) number'' and ``Data Universal Numbering System +4 (DUNS+4) number'';

2. Adding, in alphabetical order, the definition ``Electronic Funds Transfer (EFT) indicator'';

3. Revising paragraph (1) of the definition ``Registered in the System for Award Management (SAM) database''; and

4. Adding, in alphabetical order, the definition ``Unique entity identifier''; and

c. Revising paragraph (c)(3);

The revisions and additions read as follows:

52.204-13 System for Award Management Maintenance.

* * * * *

System for Award Management Maintenance (Oct 2016)

(a) Definitions. * * *

Electronic Funds Transfer (EFT) indicator means a four-character suffix to the unique entity identifier. The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for Award Management (SAM) records for identifying alternative EFT accounts (see subpart 32.11) for the same entity.

Registered in the System for Award Management (SAM) database means that--

(1) The Contractor has entered all mandatory information, including the unique entity identifier and the EFT indicator (if applicable), the Commercial and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14), into the SAM database;

* * * * *

Unique entity identifier means a number or other identifier used to identify a specific commercial, nonprofit, or Government entity. See www.sam.gov for the designated entity for establishing unique entity identifiers.

* * * * *

(c) * * *

(3) The Contractor shall ensure that the unique entity identifier is maintained with the entity designated at www.sam.gov for establishment of the unique entity identifier throughout the life of the contract. The Contractor shall communicate any change to the unique entity identifier to the Contracting Officer within 30 days after the change, so an appropriate modification can be issued to update the data on the contract. A change in the unique entity identifier does not necessarily require a novation be accomplished.

* * * * *

20. Amend section 52.204-14 by--

a. Revising the date of the clause; and

b. Removing from paragraph (f)(1)(i) ``DUNS number'' and adding ``unique entity identifier'' in its place.

The revision reads as follows:

52.204-14 Service Contract Reporting Requirements.

* * * * *

Service Contract Reporting Requirements (Oct 2016)

* * * * *

21. Amend section 52.204-15 by--

a. Revising the date of the clause; and

b. Removing from paragraph (f)(1)(i) ``DUNS number'' and adding ``unique entity identifier'' in its place.

The revision reads as follows:

52.204-15 Service Contract Reporting Requirements for Indefinite-Delivery Contracts.

* * * * *

Service Contract Reporting Requirements for Indefinite-Delivery Contracts (Oct 2016)

* * * * *

22. Amend section 52.212-1 by revising the date of the provision and paragraph (j) to read as follows:

52.212-1 Instructions to Offerors--Commercial Items.

* * * * *

Instructions to Offerors--Commercial Items (Oct 2016)

* * * * *

(j) Unique entity identifier. (Applies to all offers exceeding $3,500, and offers of $3,500 or less if the solicitation requires the Contractor to be registered in the System for Award Management (SAM) database.) The Offeror shall enter, in the block with its name and address on the cover page of its offer, the annotation ``Unique Entity Identifier'' followed by the unique entity identifier that identifies the Offeror's name and address. The Offeror also shall enter its Electronic Funds Transfer (EFT) indicator, if applicable. The EFT indicator is a four-character suffix to the unique entity identifier. The suffix is assigned at the discretion of the Offeror to establish additional SAM records for identifying alternative EFT accounts (see subpart 32.11) for the same entity. If the Offeror does not have a unique entity identifier, it should contact the entity designated at www.sam.gov for unique entity identifier establishment directly to obtain one. The Offeror should indicate that it is an offeror for a Government contract when contacting the entity designated at www.sam.gov for establishing the unique entity identifier.

* * * * *

23. Amend section 52.212-3 by--

a. Revising the date of the provision; and

b. Removing from the introductory text of paragraph (p) ``DUNS Number'' and adding ``unique entity identifier'' in its place.

The revision reads as follows:

52.212--3 Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (Oct 2016)

* * * * *

24. Amend section 52.212-5 by revising the date of the clause and paragraphs (b)(4), (b)(6), (b)(7), and (b)(17)(i) to read as follows:

52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items (Oct 2016)

* * * * *

(b) * * *

__ (4) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (Oct 2016) (Pub. L. 109-282) (31 U.S.C. 6101 note).

* * * * *

__ (6) 52.204-14, Service Contract Reporting Requirements (Oct 2016) (Pub. L. 111-117, section 743 of Div. C).

__ (7) 52.204-15, Service Contract Reporting Requirements for Indefinite-Delivery Contracts (Oct 2016) (Pub. L. 111-117, section 743 of Div. C).

* * * * *

__ (17)(i) 52.219-9, Small Business Subcontracting Plan (Oct 2016) (15 U.S.C. 637(d)(4)).

* * * * *

25. Amend section 52.213-4 by revising the date of the clause and paragraph (b)(1)(i) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items) (Oct 2016)

* * * * *

(b) * * *

(1) * * *

(i) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (Oct 2016) (Pub. L. 109-282) (31

U.S.C. 6101 note) (Applies to contracts valued at $30,000 or more).

* * * * *

26. Amend section 52.219-9 by--

a. Revising the section heading;

b. Revising the date of the clause;

c. Removing from paragraph (d)(10)(vi) ``DUNS number,'' and adding ``unique entity identifier,'' in its place.

The revisions read as follows:

52.219-9 Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (Oct 2016)

* * * * *

PART 53--FORMS

53.214 [Amended]

27. Amend section 53.214 by removing from paragraph (d) ``SF 1447 (Rev. 2/2012)'' and adding ``SF 1447 (Rev. 8/2016)'' in its place.

53.215-1 [Amended]

28. Amend section 53.215-1 by removing from paragraph (e) ``OF 307 (9/97)'' and adding ``OF 307 (Rev. 8/2016)'' in its place.

53.219 [Amended]

29. Amend section 53.219 by removing from the paragraph ``(Rev. 10/2015)'' and adding ``(Rev. 8/2016)'' in its place.

53.236-2 [Amended]

30. Amend section 53.236-2 by removing from paragraph (b) ``SF 330 (Rev. 3/2013)'' and adding ``SF 330 (Rev. 8/2016)'' in its place.

31. Revise section 53.301-294 to read as follows:

53.301-294 Subcontracting Report for Individual Contracts.

BILLING CODE 6820-EP-P

[GRAPHIC] [TIFF OMITTED] TR30SE16.004

[GRAPHIC] [TIFF OMITTED] TR30SE16.005

[GRAPHIC] [TIFF OMITTED] TR30SE16.006

[GRAPHIC] [TIFF OMITTED] TR30SE16.007

32. Revise section 53.301-330 to read as follows:

53.301-330 Architect-Engineer Qualifications.

[GRAPHIC] [TIFF OMITTED] TR30SE16.008

[GRAPHIC] [TIFF OMITTED] TR30SE16.009

[GRAPHIC] [TIFF OMITTED] TR30SE16.010

[GRAPHIC] [TIFF OMITTED] TR30SE16.011

[GRAPHIC] [TIFF OMITTED] TR30SE16.012

[GRAPHIC] [TIFF OMITTED] TR30SE16.013

[GRAPHIC] [TIFF OMITTED] TR30SE16.014

[GRAPHIC] [TIFF OMITTED] TR30SE16.015

[GRAPHIC] [TIFF OMITTED] TR30SE16.016

[GRAPHIC] [TIFF OMITTED] TR30SE16.017

[GRAPHIC] [TIFF OMITTED] TR30SE16.018

[GRAPHIC] [TIFF OMITTED] TR30SE16.019

[GRAPHIC] [TIFF OMITTED] TR30SE16.020

[GRAPHIC] [TIFF OMITTED] TR30SE16.021

33. Revise section 53.301-1447 to read as follows:

53.301-1447 Solicitation/Contract.

[GRAPHIC] [TIFF OMITTED] TR30SE16.022

[GRAPHIC] [TIFF OMITTED] TR30SE16.023

34. Revise section 53.302-307 to read as follows:

53.302-307 Optional Form 307, Contract Award.

[GRAPHIC] [TIFF OMITTED] TR30SE16.024

[FR Doc. 2016-23198 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-C

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23199]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 5, 7, 8, 10, 12, 15, 16, 19, and 52

[FAC 2005-91; FAR Case 2014-015; Item VI; Docket No. 2014-0015, Sequence No. 1]

RIN 9000-AM92

Federal Acquisition Regulation; Consolidation and Bundling

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing a final rule to amend the Federal Acquisition Regulation (FAR) to implement sections of the Small Business Jobs Act of 2010 and regulatory changes made by the Small Business Administration, which provide for a Governmentwide policy on consolidation and bundling.

DATES: Effective: October 31, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Mahruba Uddowla, Procurement Analyst, at 703-605-2868, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-91, FAR Case 2014-015.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 80 FR 31561 on June 3, 2015, to revise the FAR to provide for a Governmentwide policy on consolidation and bundling. The proposed rule incorporated regulatory changes made by the Small Business Administration (SBA) in its final rule which published in the Federal Register at 78 FR 61113 on October 2, 2013, concerning contract consolidation and bundling.

SBA's final rule implements the statutory requirements related to bundling and consolidation as set forth in sections 1312 and 1313 of the Small Business Jobs Act of 2010 (Pub. L. 111-240), as well as section 1671 of the National Defense Authorization Act for Fiscal Year 2013 (Pub. L. 112-239). Eight respondents submitted comments on the FAR proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

A. Summary of Significant Changes

This final rule makes the following significant changes from the proposed rule:

FAR 2.101--Amends the definition of ``Small Business Teaming Arrangement'' to note the differences applicable to DoD because of the DoD Pilot Mentor-Prot[eacute]g[eacute] Program. A similar change is made at FAR 52.207-6.

FAR 7.104(d)--Amends the conditions under which the small business specialist must notify the agency Office of Small and Disadvantaged Business Utilization or the Office of Small Business Programs to be consistent with 13 CFR 125.2(c)(4)(ii).

FAR 7.105(b)(1)(iv)--The second sentence no longer mentions consolidation since SBA's implementing rule does not require the identification of incumbent contractors and contracts affected by the consolidation.

FAR 7.107-1(b)--Adds an exception for acquisitions from a mandatory source to the requirements at FAR 7.107 for acquisitions involving consolidation, bundling, or substantial bundling.

FAR 7.107-1--The coverage formerly at FAR 7.107-1 on necessary and justified bundling for consolidation and bundling has been separated and moved to 7.107-2 and 7.107-3, due to differences in the statutory and regulatory requirements.

FAR 7.107-2(e)--Provides procedures for consolidation corresponding to those for bundling at FAR 7.107-3(c) (now at 7.107-3(f)), to address the determination that consolidation is necessary and justified when the expected benefits do not meet the quantifiable dollar thresholds for a substantial benefit but are critical to the agency's mission success.

FAR 7.107-5(c)--Removes the phrase ``(even if additional requirements have been added or some have been deleted)'' and adds a subparagraph (4) which requires that the notice to SBA include a list of requirements that have been added or deleted for the follow-on bundled or consolidated procurement. The changes will facilitate a more accurate comparison of savings and benefits from the prior procurement.

FAR 15.304(c)(3) and (4)--Excludes solicitations that are set aside for small business from the requirements relating to small business subcontracting-related evaluation factors for solicitations involving consolidation.

B. Analysis of Public Comments

1. General

a. Support for the Rule

Comment: One respondent expressed general support for the rule and that the proposed changes are positive which will provide much needed transparency and ensure that unnecessary and unjustified bundling do not become the contracting standard.

Response: Noted.

b. Experiences With Consolidation

Comment: Two respondents commented on their experience with consolidation and/or bundling; the adverse impact on small businesses' ability to compete in this environment; and expressed, had this rule been in effect, their experience very likely could have been different. Response: Noted.

c. Need for Table of Thresholds

Comment: One respondent requested that a table of dollar thresholds may be useful to clarify the differences between consolidation and bundling.

Response: With regard to the use of a table to clarify the differing dollar thresholds associated with these terms, the preferred approach is to provide the guidance for processing a consolidated or bundled requirement in the area of the FAR where the respective subject matter is addressed. For example, the dollar threshold for triggering the Senior Procurement Executive's or Chief Acquisition Officer's determination of necessary and justified consolidation is discussed in the area of the FAR, 7.107-2, which addresses consolidation. Similarly, the dollar thresholds for substantial bundling and the attendant requirements for processing these acquisitions are provided at FAR 7.107-4. The FAR is arranged in this manner to allow contracting officers to quickly turn to the area of the FAR where the requisite guidance needed for their given situation is provided.

d. Mixing of Consolidation and Bundling

Comment: Three respondents commented that the rule appeared to incorrectly or unnecessarily use the terms consolidation and bundling synonymously, by applying the same requirements to both. The respondents identified the following areas in the rule where they believed that this occurred:

[cir] FAR 7.103(u)(2). This paragraph currently urges acquisition planners to avoid unnecessary and unjustified bundling that precludes participation of small business as prime contractors. The rule proposes that planners also avoid unnecessary and unjustified consolidation. One respondent believes that a consolidation that precludes participation of small business as the prime would automatically be bundling and as such, the rule is proposing an unnecessary change.

[cir] FAR 7.104(d). This paragraph currently requires coordination with the small business specialist when an acquisition meets the dollar thresholds for substantial bundling, unless the acquisition is set aside for small business. The small business specialist is required to notify the agency's small business office (e.g., Office of Small and Disadvantaged Business Utilization) when the acquisition involves unjustified or unnecessary bundling or is not identified as bundling. The rule proposes to also require notification when the acquisition involves unjustified or unnecessary consolidation or is not identified as consolidation. It was pointed out that the coordination exemption for set-asides conflicts with the proposed notification requirement in cases where consolidation results in a small business set-aside because the small business specialist would not be coordinated with in such cases so they would not be able to provide the notification.

[cir] FAR 7.105(b)(1)(iv). The rule proposes to require that for consolidated contract requirements, the acquisition plan identify the incumbent contractors and contracts affected by the consolidation. The FAR currently only requires this for bundled contract requirements. One respondent stated the proposed additional burden could result in listing thousands of contracts for a strategic sourcing acquisition and that there is no statutory requirement for said identification.

[cir] FAR 7.107-1. This subsection provides guidance on how consolidation and bundling could be determined necessary and justified. One respondent asked why the same requirements have to be met for both consolidation and bundling.

[cir] FAR 7.107-2(a). One respondent asked why there is a requirement for coordination with the Office of Small and Disadvantaged Business Utilization (OSDBU) and/or a negative impact analysis on small businesses for consolidation if the consolidation results in a small business set-aside. The respondent believes that if the acquisition is not set aside then it would automatically be bundling and that bundling has the same justification process as consolidation.

[cir] FAR 7.107-5. One respondent pointed out that this subsection starts out talking about bundling then in paragraph (c) mixes in consolidated requirements, which the respondent believes is mixing two completely different situations that are not synonymous.

[cir] FAR 15.304(c). The rule proposes to require that there be evaluation factors related to a small business subcontracting plan for consolidated requirements. Currently, the FAR only requires this for bundling. Two respondents pointed out that if a consolidated requirement is set aside for small business, a small business subcontracting plan would not be required.

[cir] FAR 19.202-1. One respondent asked why the rule is proposing to apply the requirement for 30-day notification to incumbent small businesses for consolidated requirements. The respondent also stated that paragraph (e)(2)(v) is confusing because the requirements of that paragraph would not apply if consolidation results in a small business set-aside.

Response: The Councils reviewed the areas of the rule identified by the respondents to ensure that the appropriate requirements were being applied to consolidation. The final rule has been revised at--

FAR 7.104(d) to remove ``consolidation'' in several places from the conditions under which the small business specialist must notify the agency Office of Small and Disadvantaged Business Utilization or the Office of Small Business Programs to be consistent with 13 CFR 125.2(c)(4)(ii); and

FAR 7.105(b)(1)(iv) to no longer mention consolidation in the second sentence, since sections 1312 and 1313 of the Small Business Jobs Act and SBA's implementing regulations at 13 CFR 125.2 do not require the small business identification of incumbent contractors for consolidated requirements.

The final rule has also been revised at FAR 15.304(c) to clarify that consolidated requirements which are set aside for small business will not be required to use the small business subcontracting-related evaluation factors. While SBA's regulations at 13 CFR 125.2(d)(4) require small business subcontracting plan-related evaluation factors be used for all consolidated acquisitions, implementing this requirement in the FAR would be problematic. Because FAR 15.305(a)(5) requires that small business offerors get the highest rating for these factors, every offeror would receive the same rating for such factors in the scenario where a consolidated acquisition is set aside for small business, which would make use of such evaluation factors conflict with FAR 15.304(b)(2), which requires that evaluation factors support meaningful comparison and discrimination between and among competing proposals.

The final rule retains the proposed changes (with some further edits) to FAR 7.103(u)(2), 7.104(d), 7.107-1, 7.107-2, 7.107-5, and 19.202-1 as those changes are consistent with sections 1312 and 1313 of the Small Business Jobs Act and SBA's implementing regulations at 13 CFR 125.2. The Councils note that the rule does not have a requirement for a 30-day notification to incumbent small business contractors for consolidated requirements, as one respondent stated, nor does the rule automatically define a consolidated requirement that is not set aside for small business as bundling.

2. Applicability

a. AbilityOne

Comment: One respondent asked whether the requirements for consolidation are necessary for acquisition of services from the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled (also known as the AbilityOne Commission), which is considered a mandatory source in accordance with FAR 8.002. The respondent requested the rule clarify how the mandatory sources relate to the consolidation requirements at FAR 7.107-2.

Response: For requirements that are on the Procurement List, the required source(s) to fulfill that work are already designated by the U.S. AbilityOne Commission. There would be no potential impact on small business participation or even on AbilityOne nonprofit agency participation if multiple Procurement List requirements are consolidated, because the sources will remain the same in accordance with those listed on the Procurement List. For that reason, it would not be necessary to engage in the market research or analysis required in FAR 7.107-1 and 7.107-2 if the potential consolidation only involves required sources of supply and services such as requirements on the Procurement List.

This same rationale applies to acquisitions from other mandatory sources. Therefore, the final rule has been revised at 7.107-1 to clarify that the consolidation and bundling requirements at 7.107 do not apply to acquisitions for which there are mandatory sources pursuant to FAR 8.002, ``Priorities for use of mandatory Government sources,'' or FAR 8.003, ``Use of other mandatory sources.'' The purpose of section 1313 of the Small Business Jobs Act was to limit the use of contract consolidation because of the anticipated negative impact of such an acquisition strategy on small business. However, requirements for which there is a mandatory source are not available to small business and as such, consolidation would result in no impact to small business, negative or positive. Further, neither 41 U.S.C. 8504 (the statutory authority behind the AbilityOne Program) nor 18 U.S.C. 4124(a) (another mandatory source--Federal Prison Industries) requires consolidation analyses for acquisitions done under their programs. Since application of the consolidation requirements would only create burden for the acquisition process and no benefit to small business, the Councils have determined, as a way of harmonizing different statutes, to exempt those consolidated contracts that can be met through one of the mandatory sources identified in FAR 8.002 or 8.003.

b. Blanket Purchase Agreements (BPAs)

Comment: One respondent recommended changes to multiple parts of the FAR in order to apply the bundling and consolidation analysis requirements to BPAs, especially Federal Supply Schedule (FSS) BPAs. The recommendation was based on the respondent's assumption that the Councils did not intend to exclude BPAs from bundling or consolidation analysis. The respondent requested that if the recommended changes were not made, that the final rule should address the applicability of bundling and consolidation requirements to BPAs.

Response: The statutory definition of ``bundling of contract requirements'' at paragraph (o) of 15 U.S.C. 632, Definitions, and of ``consolidation of contract requirements'' at 15 U.S.C. 657q, Consolidation of contract requirements, and SBA's implementing regulations at 13 CFR 125.1(c) and (e), only mention ``contract'' in terms of bundling and consolidation. BPAs are not contracts and therefore neither statute nor the implementing regulations apply the consolidation and bundling analysis requirements to them; however, orders under BPAs are treated as contracts in SBA's regulations at 13 CFR 125.1(d). The FAR definitions of ``consolidation'' and ``bundling'' apply to task or delivery orders, including those issued under BPAs.

c. 8(a)

Comment: One respondent requested that the requirement for a consolidation determination and findings (D&F) be waived for consolidation affecting or relating to sole source awards under the 8(a) program, due to concerns over potentially longer procurement lead times. Moreover, the respondent suggested that the requirement for a consolidation D&F contradicts FAR 6.302-5(b)(4) and the intent of paragraph 8(a) of the Small Business Act.

Response: Neither the statute nor SBA's final rule waived or exempted consolidations under or relating to the 8(a) Program; therefore, the new requirement is, in fact, applicable to all consolidations with an estimated total dollar value exceeding $2 million, even those where the new consolidated award will be made via sole source contract under the 8(a) Program.

3. Definitions

a. ``Acquisition Planning Team'' and ``Planner''

Comment: One respondent requested definitions of ``acquisition planning team'' and ``planner,'' in relation to the requirement at FAR 7.104 that small business is to be a discipline that is represented on the acquisition planning team.

Response: These are not new terms introduced to the FAR by this rule. ``Planner'' is currently defined at FAR 7.101 to mean the designated person or the office responsible for developing and maintaining a written plan, or for the planning function in those acquisitions not requiring a written plan.

``Acquisition planning'' is defined in FAR 2.101. FAR 7.104 addresses the composition of the acquisition planning team, i.e., the planner shall form a team consisting of all those who will be responsible for significant aspects of the acquisition, such as contracting, fiscal, legal, and technical personnel. This rule adds small business personnel to this list of functional experts that comprise the acquisition planning team.

b. ``Bundling'' and ``Consolidation''

Comment: One respondent finds the definitions of ``bundling'' and ``consolidation'' useful to clearly set forth the requirements.

Response: Noted.

Comment: One respondent was concerned whether the statement in the definition of ``bundling or bundled contract'' that ``this definition does not apply to contracts that will be awarded and performed entirely outside the United States'' was intended to limit the applicability of the rule based on where the contract will be awarded and performed. The respondent further noted a potential inconsistency between that statement and the statement in the SBA regulations at 13 CFR 125.2(c) that the Small Business Act requires each Federal agency to foster the participation of small business concerns as prime contractors and subcontractors in the contracting opportunities of the Government, regardless of the place of performance of the contract. According to the respondent, the Court of Federal Claims has concluded that SBA's implementation of a provision of the Small Business Act via regulation must be viewed as controlling where there is an inconsistent FAR rule (C&G Excavating. Inc. v. U.S., 32 Fed. Cl. 231 (Fed. Cl. 1994).

Response: This issue will be considered under FAR case 2016-002, Applicability of Small Business Regulations Outside the United States.

4. Acquisition Planning (FAR 7.104 and 7.105)

Comment: With regard to the clarification at FAR 7.104(a) that small business is to be a discipline that is represented in the acquisition planning team, one respondent stated that SBA will be working with at least a DD Form 2579 on most actions, so depending on the dollar amount is that sufficient? The respondent questioned the formality of the SBA involvement.

Response: The small business specialist on the acquisition planning team will probably be a representative of the agency small business office, not the SBA. The SBA will be working with, at a minimum, a DoD Form 2579, Small Business Coordination Record, or equivalent when reviewing acquisitions for consolidation or bundling. Currently, SBA's regulations at 13 CFR 125.2(c)(1)(v) require that an agency must notify the SBA within 30 days prior to the issuance of a solicitation for a bundled or consolidated contract and also requires that the DoD Form 2579 or equivalent must be sent to the SBA procurement center representative.

The formality of SBA's involvement is expanded upon by FAR 19.202-1(e)(1)(iii), which further requires agencies to provide a copy of the acquisition package to the SBA procurement center representation if the proposed requirement is for a bundled requirement. This acquisition package includes ``all information relative to the justification of contract bundling, including the acquisition plan or strategy.'' This rule also requires this information for consolidation. If the acquisition involves substantial bundling, the agency must provide the requirements listed at FAR 7.107(e), moved in the final rule to 7.107-4.

Comment: One respondent commented that the thresholds proposed in FAR 7.104(d) for consultation with the cognizant small business specialist should be compared to current FAR or Defense Federal Acquisition Regulation Supplement (DFARS) thresholds for such review. The respondent was concerned that these thresholds would likely result in a much larger workload that should be coordinated with SBA.

Response: The requirements to coordinate with the small business specialist when a requirement meets the threshold for substantial bundling already exist in the current FAR at 7.104(d)(1). The thresholds currently listed in FAR 7.104(d)(2)(i) still exist and are the thresholds used to differentiate ``bundling'' from ``substantial bundling''. However, FAR 7.104 is being amended to remove the substantial bundling thresholds, which will be relocated in a new section, FAR 7.107-4 for clarity and consistency purposes. Therefore, there is no increase in workload for the small business specialists due to the threshold.

Comment: One respondent stated that most FAR/DFARS language speaks to acquisition planning and not strategies.

Response: Acquisition strategies are heavily considered in both the FAR and DFARS. As stated in the acquisition planning definition at FAR 2.101, acquisition planning includes developing the overall strategy for managing the acquisition. FAR 7.107-3(f)(2) in the final rule (formerly FAR 7.107(c)(2)) indicates that the acquisition strategy must provide for maximum practicable participation by small business concerns. FAR 7.107-4(b) in the final rule (formerly FAR 7.107(e)) goes further and describes additional elements for the acquisition strategy when there is substantial bundling.

5. Additional Requirements--Consolidation, Bundling, or Substantial Bundling (FAR 7.107)

a. General Requirements (FAR 7.107-1)

Comment: One respondent acknowledged numerous benefits to the rule and how it will standardize the management of requirements bundling across Government agencies. This standardized approach was noted to provide more visibility into Government contracting. The respondent additionally lauded FAR 7.107-1(b) for its identification of the possible benefits that may be attained from bundling or consolidation such as cost savings; price-reduction; quality improvements, etc. Furthermore, the respondent supported the thresholds in the rule for the Government to use to substantiate the benefits of bundling or consolidation including the threshold in FAR 7.107-1(e) requiring cost savings based on administrative or personnel costs must be at least 10 percent to prevent potential misleading justifications about administrative costs.

Response: Noted.

Comment: One respondent commented on the appropriateness of the Senior Procurement Executive (SPE) or Chief Acquisition Officer (CAO) making the determination of cost savings of consolidated requirements. Of particular concern, the respondent felt the determination should be the responsibility of the customer/requirements owner.

Response: Generally, FAR determinations that pertain to the acquisition process are made by acquisition professionals (e.g., CAO, SPE, contracting officer, etc.). Paragraph (c)(2)(B) of 15 U.S.C. 657q, Consolidation of contract requirements, requires the determination of cost savings under a consolidated requirement be made by the SPE or CAO. The language used in the rule provides flexibility as to who would actually write or provide any supporting document as the SPE or CAO are only required to make the determination.

Comment: One respondent commented that Government agencies are required to meet 10 percent savings requirement for consolidation, even though they are potentially still setting aside for small businesses. If they cannot meet that savings objective then they cannot consolidate requirements and therefore cannot save the taxpayer money. This requirement will also cause the Government to expand its needed resources in order to ensure enough personnel to provide proper oversight of multiple orders.

Response: The Councils reviewed the comment and have included in FAR 7.107-2(e) the similar authority contained in the final rule for FAR 7.107-3(f), which allows specific senior officials under certain circumstances to determine that consolidation is necessary and justified, even though expected benefits do not meet the quantifiable dollar thresholds for a substantial benefit. Section 1313 provides that a SPE or CAO may determine that an acquisition strategy involving consolidation is necessary and justified if the benefits of the acquisition strategy substantially exceed the benefits of each of the possible alternative contracting approaches identified that would involve a lesser degree of consolidation. In the preamble to the SBA final rule, SBA indicated (published in the Federal Register at 78 FR 61120) that since the Small Business Jobs Act does not define the terms ``substantially exceed'' or ``benefits'' for contractual consolidation, SBA used the definitions for those terms currently set forth in the bundling regulations in 13 CFR 125. Therefore, it is reasonable, in implementation of these thresholds in the FAR, to provide the same procedures set forth at 13 CFR 125.2(d)(2)(iii) with regard to the authority to make a determination that consolidation is necessary and justified even though the benefits do not meet the thresholds for substantial benefits, but in the aggregate are critical to the agency's mission success.

b. Consolidation (FAR 7.107-2)

Comment: One respondent discussed the consolidation of contract requirements specified at FAR 7.107-2 and expressed that the $2 million dollar threshold which would require a justification is adequate, without being overly burdensome. Additionally, the respondent commented that the review process and the impact analysis on small businesses when contract consolidation is being contemplated are preventive measures to ensure consolidation is justified.

Response: Noted.

c. Bundling (FAR 7.107-3)

Comment: One respondent recommended additional guidance to be provided to clarify the term ``measurably substantial'' when agencies are quantifying specific benefits to be achieved from bundling. FAR 7.107-3(b) requires an agency to quantify the specific benefits identified through market research and other techniques to explain how their impact would be measurably substantial (see 10.001(a)(2)(iv) and (a)(3)(vii)).

The respondent is also concerned that after market analysis and cost analysis is complete, if the benefits do not meet the thresholds for a substantial benefit, the military service acquisition executive, Deputy Secretary, or equivalent position may still determine that bundling is necessary and justified. The respondent is concerned that this section could convert itself to a catch-all for any acquisition that does not meet the requirements but the Agency still feels compelled to bundle.

Response: The SBA regulations at 13 CFR 125.2(d)(2)(ii) require the benefits to be measurably substantial in order for the bundling to be necessary and justified. This requirement is implemented at FAR 7.107-3(a).

Benefits of bundling are measurably substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to--

(1) Ten percent of the estimated contract or order value (including options) if the value is $94 million or less; or

(2) Five percent of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million.

The final rule now incorporates at FAR 7.107-3(d) the discussion of substantial benefits that was located at FAR 7.107-1(d). The benefits are measurably substantial when the agency can quantify the specific benefits identified through the use of market research and other techniques.

If the thresholds are not met, FAR 7.107-3(f) requires a high level determination, without power of delegation, that the expected benefits are critical for the agency's mission success, and that the acquisition strategy provides for maximum practicable participation by small business concerns. These protections are sufficient to ensure that agencies are not able to use this exception as a catch-all for acquisitions that do not meet the requirements.

d. Substantial Bundling (FAR 7.107-4)

Comment: One respondent found the separate definition and discussion on substantial bundling at FAR 7.107-4 to be helpful as it sets forth and distinguishes the requirements of substantial bundling from consolidation and bundling (FAR 7.107-2 and 7.107-3, respectively). The respondent further commented that the documentation requirements of specific benefits to be derived from substantial bundling are a positive protection for small businesses.

Response: Noted.

6. Notification (FAR 7.107-5)

a. Notification to Small Businesses

Comment: Two respondents commented on the requirements at FAR 7.107-5(a) to notify each small business performing a contract that it intends to bundle the requirement with one or more other requirements at least 30 days prior to the issuance of the solicitation for the bundled requirement. Both respondents considered that the 30 day time period was insufficient. One respondent stated that the Government must know this far in advance of 30 days. The other respondent noted that 30 days does not provide adequate time for the small business to coordinate with the designated SBA Procurement Center representative or designated contact. The respondent suggested at least 45 calendar days.

One respondent asked what the documentation requirements are for this in the contract file.

Response: This final rule implements the SBA regulations (see 13 CFR 125.2(d)(5)), which specify a time period of least 30 days prior to the issuance of the solicitation. Those regulations and FAR 7.107-5(a)(3) require documentation of the notification in the contract file. The contracting officer has discretion on how best to document the contract file.

b. Notification to the Public

Two respondents commented on the requirement at FAR 7.107-5(b) that the agency notify the public of the rationale for a bundled requirement, via the agency's Web site.

Comment: One respondent asked whether this reporting duty can be delegated to the chief acquisition executive/senior procurement executive or head of the contracting activity.

Response: The statute requires the head of the agency to post this information to the agency Web site, but does not prohibit redelegation. FAR 1.108(b) states that each authority is delegable unless specifically stated otherwise. Therefore, the actual posting can be delegated to an appropriate level within the agency.

Comment: Another respondent supported the proposed amendments to require publication on the Web site but noted that the requirement was only mandatory for any bundled requirements for which the agency has solicited offers or issued an award, whereas the agency is only encouraged to provide notification to FedBizOpps before the issuance of the solicitation. The respondent recommended that this presolicitation notification to the public should be mandatory.

Response: This FAR rule is implementing the SBA regulations at 13 CFR 125.2(d)(6) and the statute, which mandate publication of bundled requirements on agency Web sites on an annual basis. The SBA regulations only encourage providing such notification before issuance of the solicitation, and do not specify FedBizOpps or any particular Web site as the location of such posting.

c. Notification to SBA

Comment: One respondent commented that the requirement to notify SBA of each follow-on bundled or consolidated contract will provide more complete data regarding whether consolidation or bundling actually was a positive outcome for the agency. According to the respondent, including the historical data of the amount of savings and benefits that resulted from the consolidation or bundling and then comparing it to whether such benefits will continue in a follow-on contract will provide an excellent opportunity for analysis.

Response: Noted.

7. Provision (FAR 52.207-6)

Comment: One respondent requested information on the provision in the proposed rule to be included in each solicitation for any multiple-award contract above the substantial bundling threshold. The respondent had concerns that this rule appeared to indicate that the normal requirement is to set up multiple-award contracts only for large business and overlooks the process for set-aside contracts. This respondent suggested that the provision should provide for a higher evaluation of a large business teaming with a small business, or if it has a substantial small business subcontracting plan.

Response: The provision at FAR 52.207-6 is required by section 1312(a) of the Small Business Jobs Act of 2010 and the SBA regulations. The statute requires ``a provision soliciting bids from any responsible source, including responsible small business concerns and teams or joint ventures of small business concerns.''

C. Other Changes

At FAR 2.101 and in the clause at 52.207-6, the definition of ``Small Business Teaming Arrangement'' has been amended to add a subparagraph in paragraph (2) to explain that for DoD, a Small Business Teaming Arrangement may include two business concerns in a mentor-prot[eacute]g[eacute] relationship in the Department of Defense Pilot Mentor-Prot[eacute]g[eacute] Program (see section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510; 10 U.S.C. 2302 note) only so long as both the mentor and the prot[eacute]g[eacute] are small. There is no exception to joint venture size affiliation for offers received from Small Business Teaming Arrangements under the Department of Defense Pilot Mentor-Prot[eacute]g[eacute] Program. In addition, a clarification is added in paragraph (3) of the definition, that this exception to affiliation applies in the case of a solicitation of offers for a bundled contract with a reserve (as stated at 13 CFR 121.103(b)(9)).

The definition of ``Bundling'' at FAR 2.101 has been amended for clarity and to remove the proposed reference to the description of substantial bundling in part 7. The definition of ``Consolidation'' has been amended to remove redundant terms. The phrase ``contract requirements'' is removed for clarity wherever it is associated with bundling and consolidation in the final rule, since bundling and consolidation apply to orders as well as contracts.

For consistency, the final rule amends the text at FAR 5.205(g) to reflect the specific text at FAR 7.107-5(b)(2), instead of paraphrasing.

The final rule contains a minor editorial correction to the cross-reference at FAR 7.107-3(b).

At FAR 7.107-3(f), the identification of officials authorized to make the determination in the Department of Defense that bundling is necessary and justified, even if the anticipated savings do not meet the specified thresholds, has been amended to more closely reflect the SBA regulation at 13 CFR 125.2(d)(2)(iii).

At FAR 7.107-4(a)(1), the final rule adds language which conforms to other proposed changes for subpart 7.1, which consists of spelling out ``task order or delivery order'' whenever talking about requirements associated with bundling or consolidation. The use of this distinct terminology is due to FAR subpart 7.1 already having a definition for ``order'' which does not accurately describe the orders to which bundling and consolidation requirements apply. Consequently, because there is no conflicting definition of ``order'' in FAR subparts 8.4 or 16.5, the final rule has been amended to remove the proposed use of the distinct terminology in those subparts.

The final rule contains a number of editorial changes such as the addition of cross-references in FAR 7.107-2, 7.107-3, and 7.107-6, removal of redundant text in 7.107-5(a), and the deletion of ``significant'' from 19.201(c)(5)(i) as there is no definition for ``significant bundling''.

III. Applicability to Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items

This rule creates provision FAR 52.207-6, Solicitation of Offers from Small Business Concerns and Small Business Teaming Arrangements or Joint Ventures (Multiple-Award Contracts), in order to implement paragraph (a) of section 1312 of the Small Business Jobs Act of 2010. This paragraph concerns 15 U.S.C. 644, Awards or Contracts, and therefore applies as a matter of law to COTS items. The Federal Acquisition Regulatory Council, pursuant to the authority granted in 41 U.S.C. 1906, List of laws inapplicable to procurements of commercial items, and the Administrator for Federal Procurement Policy, pursuant to the authority granted in 41 U.S.C. 1907, List of laws inapplicable to procurements of commercially available off-the-shelf items, have determined that it would not be in the best interest of the Federal Government to exempt solicitations for the acquisition of commercial items from the applicability of paragraph (a) of section 1312, entitled ``Leadership and Oversight,'' of the Small Business Jobs Act, or to exempt solicitations for the acquisition of commercial items or for COTS from the applicability of paragraph (a) of section 1313, entitled ``Consolidation of Contract Requirements''. The FAR provision 52.207-6, Solicitation of Offers from Small Business Concerns and Small Business Teaming Arrangements or Joint Ventures (Multiple-Award Contracts), has been written so that the application of the provision is carefully tailored, consistent with the statute. The provision is a notice to offerors that imposes no burdens, but simply encourages small business concerns and small business teaming arrangements or joint ventures of small business concerns to submit offers on multiple-award contracts above the substantial bundling threshold of the Federal agency. Therefore, the potential benefits to small business entities outweigh any potential drawback of application to acquisitions of commercial items.

The consolidation requirements of section 1313 should apply to all contracts and subcontracts above the threshold(s) specified in the statute, including contracts and subcontracts for the acquisition of commercial items and COTS. The statute requires agencies to ensure increased consideration of small businesses in connection with the establishment of multiple award contracts and acquisitions that consolidate contracts. Not applying these requirements to the maximum extent possible would exclude a significant number of acquisitions which would not help to protect the interests of small businesses and boost their opportunities in the Federal marketplace. Not applying the consolidation requirements to the acquisition of commercial items or COTS would limit the full implementation of the Small Business Jobs Act of 2010. For all of these reasons, it is in the best interest of the Federal Government to apply the consolidation requirements to all contracts and subcontracts above the threshold(s) specified in the statute.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The final rule amends the FAR to provide uniform guidance on consolidation and bundling consistent with SBA's final rule which was published in the Federal Register at 78 FR 61113 on October 2, 2013, which implements Sections 1312 and 1313 of the Small Business Jobs Act of 2010 (Pub. L. 111-240) and section 1671 of Pub. L. 112-239.

The rule requires the head of the agency to publish on the agency Web site a list and rationale for bundled contracts; requires solicitation for multiple-award contracts above the substantial bundling threshold to include a provision soliciting bids from any responsible source; requires agencies to publish bundling policy on agency Web site; provides for a definition of ``consolidation;'' and, prohibits an agency from carrying out consolidation of requirements over $2 million until certain actions are taken. The objective of this rule is to alleviate the adverse effects of contract bundling and consolidation on small business concerns competing for Federal contracts. This rule provides a balance between the benefits of bundling and consolidation and the obstacles they create for small businesses.

There were no significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis provided in the proposed rule.

This rule may have a positive economic impact on any small business entity that wishes to participate in the Federal procurement arena. Analysis of the SAM database indicates there are currently approximately 307,846 small business registrants that can potentially benefit from the implementation of this rule. This rule does not impose any new reporting, recordkeeping or other compliance requirements.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

VI. Paperwork Reduction Act

The rule does not contain any information collection requirements

that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 2, 5, 7, 8, 10, 12, 15, 16, 19, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 5, 7, 8, 10, 12, 15, 16, 19, and 52 as set forth below:

1. The authority citation for 48 CFR parts 2, 5, 7, 8, 10, 12, 15, 16, 19, and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 2--DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101, in paragraph (b)(2) by--

a. Removing the definition ``Bundled contract'';

b. Revising the definition ``Bundling''; and

c. Adding, in alphabetical order, the definitions ``Consolidation, or consolidated requirement'' and ``Small Business Teaming Arrangement''.

The revision and additions read as follows:

2.101 Definitions.

* * * * *

(b) * * *

(2) * * *

Bundling--

(1) Means a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts (see paragraph (2) of this definition), into a solicitation for a single contract, a multiple-award contract, or a task or delivery order that is likely to be unsuitable for award to a small business concern (even if it is suitable for award to a small business with a Small Business Teaming Arrangement) due to--

(i) The diversity, size, or specialized nature of the elements of the performance specified;

(ii) The aggregate dollar value of the anticipated award;

(iii) The geographical dispersion of the contract performance sites; or

(iv) Any combination of the factors described in paragraphs (1)(i), (ii), and (iii) of this definition.

(2) ``Separate smaller contract'' as used in this definition, means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns.

(3) This definition does not apply to a contract that will be awarded and performed entirely outside of the United States.

* * * * *

Consolidation or consolidated requirement--

(1) Means a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy--

(i) Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or

(ii) Requirements of the Federal agency for construction projects to be performed at two or more discrete sites.

(2) Separate contract as used in this definition, means a contract that has been performed by any business, including small and other than small business concerns.

* * * * *

Small Business Teaming Arrangement--

(1) Means an arrangement where--

(i) Two or more small business concerns have formed a joint venture; or

(ii) A small business offeror agrees with one or more other small business concerns to have them act as its subcontractors under a specified Government contract. A Small Business Teaming Arrangement between the offeror and its small business subcontractor(s) exists through a written agreement between the parties that--

(A) Is specifically referred to as a ``Small Business Teaming Arrangement''; and

(B) Sets forth the different responsibilities, roles, and percentages (or other allocations) of work as it relates to the acquisition;

(2)(i) For civilian agencies, may include two business concerns in a mentor-prot[eacute]g[eacute] relationship when both the mentor and the prot[eacute]g[eacute] are small or the prot[eacute]g[eacute] is small and the concerns have received an exception to affiliation pursuant to 13 CFR 121.103(h)(3)(ii) or (iii).

(ii) For DoD, may include two business concerns in a mentor-

prot[eacute]g[eacute] relationship in the Department of Defense Pilot Mentor-Prot[eacute]g[eacute] Program (see section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510; 10 U.S.C. 2302 note)) when both the mentor and the prot[eacute]g[eacute] are small. There is no exception to joint venture size affiliation for offers received from teaming arrangements under the Department of Defense Pilot Mentor-Prot[eacute]g[eacute] Program; and

(3) See 13 CFR 121.103(b)(9) regarding the exception to affiliation for offers received from Small Business Teaming Arrangements in the case of a solicitation of offers for a bundled contract with a reserve.

* * * * *

PART 5--PUBLICIZING CONTRACT ACTIONS

3. Amend section 5.205 by adding paragraph (g) to read as follows.

5.205 Special situations.

* * * * *

(g) Notification to the public of rationale for bundled requirement. The agency is encouraged to provide notification of the rationale for any bundled requirement to the GPE before issuing the solicitation of any bundled requirement (see 7.107-5(b)(2)).

PART 7--ACQUISITION PLANNING

4. Amend section 7.103 by revising paragraph (u)(2) to read as follows:

7.103 Agency-head responsibilities.

* * * * *

(u) * * *

(2) Avoid unnecessary and unjustified consolidation or bundling (see 7.107) (15 U.S.C. 631(j) and 15 U.S.C. 657q).

* * * * *

5. Amend section 7.104 by removing from paragraph (a) ``contracting,'' and adding ``contracting, small business,'' in its place; and revising paragraph (d) to read as follows:

7.104 General procedures.

* * * * *

(d) The planner shall coordinate the acquisition plan or strategy with the cognizant small business specialist when the strategy contemplates an acquisition meeting the thresholds in 7.107-4 for substantial bundling unless the contract or task order or delivery order is entirely reserved or set-aside for small business under part 19. The small business specialist shall notify the agency Office of Small and Disadvantaged Business Utilization or the Office of Small Business Programs if the strategy involves--

(1) Bundling that is unnecessary or unjustified; or

(2) Bundled or consolidated requirements not identified as such by the agency (see 7.107).

* * * * *

6. Amend section 7.105 by revising paragraph (b)(1) to read as follows:

7.105 Contents of written acquisition plans.

* * * * *

(b) Plan of action--(1) Sources. (i) Indicate the prospective sources of supplies or services that can meet the need.

(ii) Consider required sources of supplies or services (see part 8) and sources identifiable through databases including the Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies available at https://www.contractdirectory.gov/contractdirectory/.

(iii) Include consideration of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns (see part 19).

(iv) Consider the impact of any consolidation or bundling that might affect participation of small businesses in the acquisition (see 7.107) (15 U.S.C. 644(e) and 15 U.S.C. 657q). When the proposed acquisition strategy involves bundling, identify the incumbent contractors and contracts affected by the bundling.

(v) Address the extent and results of the market research and indicate their impact on the various elements of the plan (see part 10).

* * * * *

7. Revise section 7.107 to read as follows:

7.107 Additional requirements for acquisitions involving consolidation, bundling, or substantial bundling.

8. Add sections 7.107-1 through 7.107-6 to read as follows:

7.107-1 General.

(a) If the requirement is considered both consolidated and bundled, the agency shall follow the guidance regarding bundling in 7.107-3 and 7.107-4.

(b) The requirements of this section 7.107 do not apply--

(1) If a cost comparison analysis will be performed in accordance with OMB Circular A-76 (except 7.107-4 still applies);

(2) To orders placed under single-agency task-order contracts or delivery-order contracts, when the requirement was considered in determining that the consolidation or bundling of the underlying contract was necessary and justified; or

(3) To requirements for which there is a mandatory source (see 8.002 or 8.003), including supplies and services that are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled or the Schedule of Products issued by Federal Prison Industries, Inc. This exception does not apply--

(i) When the requiring agency obtains a waiver in accordance with 8.604 or an exception in accordance with 8.605 or 8.706; or

(ii) When optional acquisitions of supplies and services permitted under 8.713 are included.

7.107-2 Consolidation.

(a) Consolidation may provide substantial benefits to the Government. However, because of the potential impact on small business participation, before conducting an acquisition that is a consolidation of requirements with an estimated total dollar value exceeding $2 million, the senior procurement executive or chief acquisition officer shall make a written determination that the consolidation is necessary and justified in accordance with 15 U.S.C. 657q, after ensuring that--

(1) Market research has been conducted;

(2) Any alternative contracting approaches that would involve a lesser degree of consolidation have been identified;

(3) The determination is coordinated with the agency's Office of Small Disadvantaged Business Utilization or the Office of Small Business Programs;

(4) Any negative impact by the acquisition strategy on contracting with small business concerns has been identified; and

(5) Steps are taken to include small business concerns in the acquisition strategy.

(b) The senior procurement executive or chief acquisition officer may determine that the consolidation is necessary and justified if the benefits of the acquisition would substantially exceed the benefits that would be derived from each of the alternative contracting approaches identified under paragraph (a)(2) of this subsection, including benefits that are quantifiable in dollar amounts as well as any other specifically identified benefits.

(c) Such benefits may include cost savings or price reduction and, regardless of whether quantifiable in dollar amounts--

(1) Quality improvements that will save time or improve or enhance performance or efficiency;

(2) Reduction in acquisition cycle times;

(3) Better terms and conditions; or

(4) Any other benefit.

(d) Benefits. (1) Benefits that are quantifiable in dollar amounts are substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to--

(i) Ten percent of the estimated contract or order value (including options) if the value is $94 million or less; or

(ii) Five percent of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million.

(2) Benefits that are not quantifiable in dollar amounts shall be specifically identified and otherwise quantified to the extent feasible.

(3) Reduction of administrative or personnel costs alone is not sufficient justification for consolidation unless the cost savings are expected to be at least 10 percent of the estimated contract or order value (including options) of the consolidated requirements, as determined by the senior procurement executive or chief acquisition officer (15 U.S.C. 657q(c)(2)(B)).

(e)(1) Notwithstanding paragraphs (a) through (d) of this subsection, the approving authority identified in paragraph (e)(2) of this subsection may determine that consolidation is necessary and justified when--

(i) The expected benefits do not meet the thresholds for a substantial benefit at paragraph (d)(1) of this subsection but are critical to the agency's mission success; and

(ii) The procurement strategy provides for maximum practicable participation by small business.

(2) The approving authority is--

(i) For the Department of Defense, the senior procurement executive; or

(ii) For the civilian agencies, the Deputy Secretary or equivalent.

(f) If a determination is made that consolidation is necessary and justified, the contracting officer shall include it in the acquisition strategy documentation and provide it to the Small Business Administration (SBA) upon request.

7.107-3 Bundling.

(a) Bundling may provide substantial benefits to the Government. However, because of the potential impact on small business participation, before conducting an acquisition strategy that involves bundling, the agency shall make a written determination that the bundling is necessary and justified in accordance with 15 U.S.C. 644(e). A bundled requirement is considered necessary and justified if the agency would obtain measurably substantial benefits as compared to meeting its agency's requirements through separate smaller contracts or orders.

(b) The agency shall quantify the specific benefits identified through the use of market research and other techniques to explain how their impact would be measurably substantial (see 10.001(a)(2)(iv) and (a)(3)(vii)).

(c) Such benefits may include, but are not limited to--

(1) Cost savings;

(2) Price reduction;

(3) Quality improvements that will save time or improve or enhance performance or efficiency;

(4) Reduction in acquisition cycle times, or

(5) Better terms and conditions.

(d) Benefits are measurably substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to--

(1) Ten percent of the estimated contract or order value (including options) if the value is $94 million or less; or

(2) Five percent of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million.

(e) Reduction of administrative or personnel costs alone is not sufficient justification for bundling unless the cost savings are expected to be at least ten percent of the estimated contract or order value (including options) of the bundled requirements.

(f)(1) Notwithstanding paragraphs (a) through (e) of this subsection, the approving authority identified in paragraph (f)(2) of this subsection may determine that bundling is necessary and justified when--

(i) The expected benefits do not meet the thresholds for a substantial benefit but are critical to the agency's mission success; and

(ii) The acquisition strategy provides for maximum practicable participation by small business concerns.

(2) The approving authority, without power of delegation, is--

(i) For the Department of Defense, the senior procurement executive; or

(ii) For the civilian agencies is the Deputy Secretary or equivalent.

(g) In assessing whether cost savings and/or price reduction would be achieved through bundling, the agency and SBA shall--

(1) Compare the price that has been charged by small businesses for the work that they have performed; or

(2) Where previous prices are not available, compare the price, based on market research, that could have been or could be charged by small businesses for the work previously performed by other than a small business.

(h) If a determination is made that bundling is necessary and justified, the contracting officer shall include it in the acquisition strategy documentation and provide it to SBA upon request.

7.107-4 Substantial bundling.

(a)(1) Substantial bundling is any bundling that results in a contract task or delivery order with an estimated value of--

(i) $8 million or more for the Department of Defense;

(ii) $6 million or more for the National Aeronautics and Space Administration, the General Services Administration, and the Department of Energy; or

(iii) $2.5 million or more for all other agencies.

(2) These thresholds apply to the cumulative estimated dollar value (including options) of--

(i) Multiple-award contracts;

(ii) Task orders or delivery orders issued against a GSA Schedule contract; or

(iii) Task orders or delivery orders issued against a task-order or delivery-order contract awarded by another agency.

(b) In addition to addressing the requirements for bundling (see 7.107-3), when the proposed acquisition strategy involves substantial bundling, the agency shall document in its strategy--

(1) The specific benefits anticipated to be derived from substantial bundling;

(2) An assessment of the specific impediments to participation by small business concerns as contractors that result from substantial bundling;

(3) Actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming;

(4) Actions designed to maximize small business participation as subcontractors (including suppliers) at any tier under the contract, or order, that may be awarded to meet the requirements;

(5) The determination that the anticipated benefits of the proposed bundled contract or order justify its use; and

(6) Alternative strategies that would reduce or minimize the scope of the bundling, and the rationale for not choosing those alternatives.

7.107-5 Notifications.

(a) Notifications to current small business contractors of agency's intent to bundle. (1) The contracting officer shall notify each small business performing a contract that it intends to bundle the requirement at least 30 days prior to the issuance of the solicitation for the bundled requirement.

(2) The notification shall provide the name, phone number and address of the applicable SBA procurement center representative (PCR), or if an SBA PCR is not assigned to the procuring activity, the SBA Office of Government Contracting Area Office serving the area in which the buying activity is located.

(3) This notification shall be documented in the contract file.

(b) Notification to public of rationale for bundled requirement. (1) The agency shall publish on its Web site a list and rationale for any bundled requirement for which the agency solicited offers or issued an award. The notification shall be made within 30 days of the agency's data certification regarding the validity and verification of data entered in the Federal Procurement Data System to the Office of Federal Procurement Policy (see 4.604).

(2) In addition, the agency is encouraged to provide notification of the rationale for any bundled requirement to the GPE, before issuance of the solicitation (see 5.201).

(c) Notification to SBA of follow-on bundled or consolidated requirements. For each follow-on bundled or consolidated requirement, the contracting officer shall obtain the following from the requiring activity and notify the SBA PCR no later than 30 days prior to issuance of the solicitation:

(1) The amount of savings and benefits achieved under the prior consolidation or bundling.

(2) Whether such savings and benefits will continue to be realized if the contract remains consolidated or bundled.

(3) Whether such savings and benefits would be greater if the procurement requirements were divided into separate solicitations suitable for award to small business concerns.

(4) List of requirements that have been added or deleted for the follow-on.

(d) Public notification of bundling policy. In accordance with 15 U.S.C. 644(q)(2)(A)(ii), agencies shall publish the Governmentwide policy regarding contract bundling, including regarding the solicitation of teaming and joint ventures, on their agency Web site.

7.107-6 Solicitation provision.

The contracting officer shall insert the provision at 52.207-6, Solicitation of Offers from Small Business Concerns and Small Business Teaming Arrangements or Joint Ventures (Multiple-Award Contracts), in solicitations for multiple-award contracts above the substantial bundling threshold of the agency (see 7.107-4(a)).

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

9. Amend section 8.404 by revising paragraph (c)(2) to read as follows:

8.404 Use of Federal Supply Schedules.

* * * * *

(c) * * *

(2) Shall comply with all FAR requirements for a consolidated or bundled contract when the order meets the definition at 2.101(b) of ``consolidation'' or ``bundling''; and

* * * * *

PART 10--MARKET RESEARCH

10. Amend section 10.001 by--

a. Revising the introductory text of paragraph (a);

b. Revising paragraphs (a)(2)(iv) and (a)(2)(vi)(B);

c. Removing from the end of paragraph (a)(3)(v) ``efficiency; and'' and adding ``efficiency;'' in its place;

d. Redesignating paragraphs (a)(3)(vi) and (vii) as paragraphs (a)(3)(vii) and (viii), respectively;

e. Adding a new paragraph (a)(3)(vi);

f. Revising the newly designated paragraph (a)(3)(vii); and

g. Revising paragraph (c).

The revisions and addition reads as follows:

10.001 Policy.

(a) Agencies shall--

* * * * *

(2) * * *

(iv) Before soliciting offers for acquisitions that could lead to consolidation or bundling (15 U.S.C. 644(e)(2)(A) and 15 U.S.C. 657q);

* * * * *

(vi) * * *

(B) Disaster relief to include debris removal, distribution of supplies, reconstruction, and other disaster or emergency relief activities (see 26.205); and

(3) * * *

(vi) Determine whether consolidation is necessary and justified (see 7.107-2) (15 U.S.C. 657q);

(vii) Determine whether bundling is necessary and justified (see 7.107-3) (15 U.S.C. 644(e)(2)(A)); and

* * * * *

(c) If an agency contemplates consolidation or bundling, the agency--

(1) When performing market research, should consult with the agency small business specialist and the local Small Business Administration procurement center representative (PCR). If a PCR is not assigned, see 19.402(a); and

(2) Shall notify any affected incumbent small business concerns of the Government's intention to bundle the requirement and how small business concerns may contact the appropriate Small Business Administration procurement center representative (see 7.107-5(a)).

* * * * *

PART 12--ACQUISITION OF COMMERCIAL ITEMS

11. Amend section 12.301 by redesignating paragraphs (d)(4) through (8) as paragraphs (d)(5) through (9), respectively; and adding a new paragraph (d)(4) to read as follows:

12.301 Solicitation provisions and contract clauses for the acquisition of commercial items.

* * * * *

(d) * * *

(4) Insert the provision at 52.207-6, Solicitation of Offers from Small Business Concerns and Small Business Teaming Arrangements or Joint Ventures (Multiple-Award Contracts), as prescribed at 7.107-6.

* * * * *

PART 15--CONTRACTING BY NEGOTIATION

12. Amend section 15.304 by revising paragraphs (c)(3)(ii) and (c)(4) to read as follows:

15.304 Evaluation factors and significant subfactors.

* * * * *

(c) * * *

(3) * * *

(ii) For solicitations that are not set aside for small business concerns, involving consolidation or bundling, that offer a significant opportunity for subcontracting, the contracting officer shall include a factor to evaluate past performance indicating the extent to which the offeror attained applicable goals for small business participation under contracts that required subcontracting plans (15 U.S.C. 637(d)(4)(G)(ii)).

* * * * *

(4) For solicitations, that are not set aside for small business concerns, involving consolidation or bundling, that offer a significant opportunity for subcontracting, the contracting officer shall include proposed small business subcontracting participation in the subcontracting plan as an evaluation factor (15 U.S.C. 637(d)(4)(G)(i)).

* * * * *

PART 16--TYPES OF CONTRACTS

13. Amend section 16.505 by revising paragraph (a)(8)(iii) to read as follows:

16.505 Ordering.

(a) * * *

(8) * * *

(iii) Shall comply with all FAR requirements for a consolidated or bundled contract when the order meets the definition at 2.101(b) of ``consolidation'' or ``bundling''.

* * * * *

14. Amend section 16.506 by adding paragraph (i) to read as follows:

16.506 Solicitation provisions and contract clauses.

* * * * *

(i) See 7.107-6 for use of 52.207-6, Solicitation of Offers from Small Business Concerns and Small Business Teaming Arrangement or Joint Ventures (Multiple-Award Contracts) in solicitations for multiple-award contracts above the substantial bundling threshold of the agency.

PART 19--SMALL BUSINESS PROGRAMS

15. Amend section 19.201 by revising paragraphs (c)(5)(i), (c)(11)(ii), and (c)(11)(iii) to read as follows:

19.201 General policy.

* * * * *

(c) * * *

(5) * * *

(i) Identify proposed solicitations that involve bundling and work with the agency acquisition officials and SBA to revise the acquisition strategies for such proposed solicitations to increase the probability of participation by small businesses as prime contractors through Small Business Teaming Arrangements;

* * * * *

(11) * * *

(ii) Adequacy of consolidated or bundled contract documentation and justifications; and

(iii) Actions taken to mitigate the effects of necessary and justified consolidation or bundling on small businesses.

* * * * *

16. Amend section 19.202-1 by revising paragraph (e)(1)(iii), the introductory text of paragraph (e)(2), and paragraphs (e)(2)(v), (e)(3), and (e)(4) to read as follows:

19.202-1 Encouraging small business participation in acquisitions.

* * * * *

(e)(1) * * *

(iii) The proposed acquisition is for a consolidated or bundled requirement. (See 7.107-5(a) for mandatory 30-day notice requirement to incumbent small business concerns.) The contracting officer shall provide all information relative to the justification for the consolidation or bundling, including the acquisition plan or strategy, and if the acquisition involves substantial bundling, the information identified in 7.107-4. The contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization.

(2) Provide a statement explaining why the--

* * * * *

(v) Consolidation or bundling is necessary and justified.

(3) Process the 30-day notification concurrently with other processing steps required prior to the issuance of the solicitation.

(4) If the contracting officer rejects the SBA procurement center representative's recommendation made in accordance with 19.402(c)(2), document the basis for the rejection and notify the SBA procurement center representative in accordance with 19.505.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

17. Add section 52.207-6 to read as follows:

52.207-6 Solicitation of Offers from Small Business Concerns and Small Business Teaming Arrangements or Joint Ventures (Multiple-Award Contracts).

As prescribed in 7.107-6, insert the following provision:

Solicitation of Offers From Small Business Concerns and Small Business Teaming Arrangements or Joint Ventures (Multiple-Award Contracts) (Oct 2016)

(a) Definition. ``Small Business Teaming Arrangement,'' as used in this provision--

(1) Means an arrangement where--

(i) Two or more small business concerns have formed a joint venture; or

(ii) A small business offeror agrees with one or more other small business concerns to have them act as its subcontractors under a specified Government contract. A Small Business Teaming Arrangement between the offeror and its small business subcontractor(s) exists through a written agreement between the parties that--

(A) Is specifically referred to as a ``Small Business Teaming Arrangement''; and

(B) Sets forth the different responsibilities, roles, and percentages (or other allocations) of work as it relates to the acquisition;

(2)(i) For civilian agencies, may include two business concerns in a mentor-prot[eacute]g[eacute] relationship when both the mentor and the prot[eacute]g[eacute] are small or the prot[eacute]g[eacute] is small and the concerns have received an exception to affiliation pursuant to 13 CFR 121.103(h)(3)(ii) or (iii).

(ii) For DoD, may include two business concerns in a mentor-prot[eacute]g[eacute] relationship in the Department of Defense Pilot Mentor-Prot[eacute]g[eacute] Program (see section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510; 10 U.S.C. 2302 note)) when both the mentor and the prot[eacute]g[eacute] are small. There is no exception to joint venture size affiliation for offers received from teaming arrangements under the Department of Defense Pilot Mentor-Prot[eacute]g[eacute] Program; and

(3) See 13 CFR 121.103(b)(9) regarding the exception to affiliation for offers received from Small Business Teaming Arrangements in the case of a solicitation of offers for a bundled contract with a reserve.

(b) The Government is soliciting and will consider offers from any responsible source, including responsible small business concerns and offers from Small Business Teaming Arrangements or joint ventures of small business concerns.

(End of provision)

[FR Doc. 2016-23199 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23201]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 17

[FAC 2005-91; FAR Case 2016-006; Item VII; Docket No. 2016-0006, Sequence No. 1]

RIN 9000-AN24

Federal Acquisition Regulation; Amendment Relating to Multi-Year Contract Authority for Acquisition of Property

AGENCY: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016, to require that ``significant'' savings would be achieved by entering into a multi-year contract.

DATES: Effective: October 31, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-91, FAR Case 2016-006.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA are amending FAR subpart 17.1 to implement section 811 of the NDAA for FY 2016 (Pub. L. 114-92). Section 811 amended subsection (a)(1) of 10 U.S.C. 2306b by striking ``substantial'' and inserting ``significant.'' This rule makes conforming changes at FAR 17.105-1(b)(1) to state that the head of an agency may enter into a multi-year contract for supplies, if the use of such a contract will result in significant savings of the total estimated costs of carrying out the program through annual contracts.

This change applies to the DoD, NASA, and the Coast Guard.

II. Publication of This Final Rule for Public Comment Is Not Required by Statute

Publication of proposed regulations, 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it addresses an internal decision by the head of agency to enter into a multi-year contract for supplies if certain criteria are met. These requirements affect only the internal operating procedures of the Government.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 does not require publication for public comment.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. Chapter 35).

List of Subject in 48 CFR Part 17

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR part 17 as set forth below:

PART 17--SPECIAL CONTRACTING METHODS

1. The authority citation for 48 CFR part 17 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51

U.S.C. 20113.

17.105-1 [Amended]

2. Amend section 17.105-1 by removing from paragraph (b)(1) ``substantial'' and adding ``significant'' in its place.

[FR Doc. 2016-23201 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23202]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 22, 25, and 52

[FAC 2005-91; FAR Case 2016-009; Item VIII; Docket No. 2016-0009, Sequence No. 1]

RIN 9000-AN25

Federal Acquisition Regulation; New Designated Countries--Ukraine and Moldova

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to add Ukraine and Moldova as new designated countries under the World Trade Organization Government

Procurement Agreement (WTO GPA).

DATES: Effective: October 31, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement Analyst, at 202-219-0202 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2016-009.

SUPPLEMENTARY INFORMATION:

I. Background

Ukraine and Moldova recently became parties to the WTO GPA on May 18, 2016, and July 14, 2016, respectively. The Trade Agreements Act (19 U.S.C. 2501 et seq.) provides the authority for the President to waive the Buy American statute and other discriminatory provisions for eligible products from countries that have signed an international trade agreement with the United States (such as the WTO GPA). The President has delegated this authority to the U.S. Trade Representative.

The U.S. Trade Representative has determined that Ukraine and Moldova will provide appropriate reciprocal competitive Government procurement opportunities to United States products and services. The U.S. Trade Representative published notices in the Federal Register waiving the Buy American statute and other discriminatory provisions for eligible products from Ukraine at 81 FR 31292 on May 18, 2016, and Moldova at 81 FR 50045 on July 29, 2016.

II. Discussion and Analysis

Therefore, this rule adds Ukraine and Moldova to the list of WTO GPA countries wherever it appears in the FAR, whether as a separate definition, part of the definition of ``designated country'' or ``Recovery Act designated country,'' or as part of the list of countries exempt from the prohibition of acquisition of products produced by forced or indentured child labor (FAR 22.1503, 25.003, 52.222-19, 52.225-5, 52.225-11, and 52.225-23).

Conforming changes are made to FAR 52.212-5, Contract Terms and Conditions Required to Implement Statute or Executive Orders--Commercial Items, and 52.213-4, Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items).

III. Publication of This Final Rule for Public Comment Is Not Required by Statute

``Publication of proposed regulations,'' 41 U.S.C. 1707, is the statute that applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it has no significant cost or administrative impact on contractors or offerors. It is just updating the lists of designated countries, in order to conform to the determinations by the U.S. Trade Representative.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 and does not require publication for public comment.

VI. Paperwork Reduction Act

The Paperwork Reduction Act does apply, because the rule affects the response of an offeror that is offering a product of Ukraine or Moldova to the information collection requirements in the provisions at FAR 52.212-3(g)(5), 52.225-6, and 52.225-11. The offeror no longer needs to list a product from Ukraine or Moldova under ``other end products,'' because Ukraine and Moldova are now designated countries. These information collection requirements are currently approved under OMB Control Numbers 9000-0025, titled: Trade Agreements Certificate; 9000-0136, titled: Commercial Item Acquisitions; and 9000-0141, Buy American--Construction, respectively. The impact, however, is negligible.

List of Subjects in 48 CFR Parts 22, 25, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 22, 25, and 52 as set forth below:

1. The authority citation for 48 CFR parts 22, 25, and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

22.1503 [Amended]

2. Amend section 22.1503 by removing from paragraph (b)(4) ``Malta,'' and ``Taiwan,'' and adding ``Malta, Moldova,'' and ``Taiwan, Ukraine,'' in their places, respectively.

PART 25--FOREIGN ACQUISITION

25.003 [Amended]

3. Amend section 25.003 by--

a. Removing from the definition ``Designated country'', paragraph (1), the words ``Malta,'' and ``Matsu'' (Chinese Taipei))'' and adding ``Malta, Moldova,'' and ``Matsu (Chinese Taipei)''), Ukraine,'' in their places, respectively; and

b. Removing from the definition ``World Trade Organization Government Procurement Agreement (WTO GPA) country'' ``Malta,'' and ``Taiwan,'' and adding the words ``Malta, Moldova,'' and ``Taiwan, Ukraine,'' in their places, respectively.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Amend section 52.212-5 by revising the date of the clause and paragraphs (b)(26) and (49) to read as follows:

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items (Oct 2016)

* * * * *

(b) * * *

__ (26) 52.222-19, Child Labor--Cooperation with Authorities and Remedies (Oct 2016) (E.O. 13126).

* * * * *

__ (49) 52.225-5, Trade Agreements (Oct 2016) (19 U.S.C. 2501, et seq., 19 U.S.C. 3301 note).

* * * * *

5. Amend section 52.213-4 by revising the date of the clause and paragraph (b)(1)(ii) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items) (Oct 2016)

* * * * *

(b) * * *

(1) * * *

(ii) 52.222-19, Child Labor--Cooperation with Authorities and Remedies (Oct 2016) (E.O. 13126). (Applies to contracts for supplies exceeding the micro-purchase threshold).

* * * * *

6. Amend section 52.222-19 by--

a. Revising the date of the clause; and

b. Removing from paragraph (a)(4) ``Malta,'' and ``Taiwan,'' and adding ``Malta, Moldova,'' and ``Taiwan, Ukraine,'' in their places, respectively.

The revision reads as follows:

52.222-19 Child Labor--Cooperation with Authorities and Remedies.

* * * * *

Child Labor--Cooperation with Authorities and Remedies (Oct 2016)

* * * * *

7. Amend section 52.225-5 by--

a. Revising the date of the clause; and

b. Removing from paragraph (a), in the definition ``Designated country'' paragraph (1), the words ``Malta,'' and ``Matsu (Chinese Taipei)''),'' and adding ``Malta, Moldova,'' and ``Matsu (Chinese Taipei)''), Ukraine,'' in their places, respectively.

The revision reads as follows:

52.225-5 Trade Agreements.

* * * * *

Trade Agreements (Oct 2016)

* * * * *

8. Amend section 52.225-11 by--

a. Revising the date of the clause; and

b. Removing from paragraph (a), in the definition ``Designated country'', paragraph (1) the words ``Malta,'' and ``Taiwan,'' and adding ``Malta, Moldova,'' and ``Taiwan, Ukraine,'' in their places, respectively.

The revision reads as follows:

52.225-11 Buy American Act--Construction Materials under Trade Agreements.

* * * * *

Buy American Act--Construction Materials Under Trade Agreements (Oct 2016)

* * * * *

9. Amend section 52.225-23 by--

a. Revising the date of the clause; and

b. Removing from paragraph (a), in the definition ``Designated country'', paragraph (1) the words ``Malta,'' and ``Taiwan,'' and adding ``Malta, Moldova,'' and ``Taiwan, Ukraine,'' in their places, respectively; and

c. Removing from paragraph (a), in the definition ``Recovery Act designated country'', paragraph (1) the words ``Malta,'' and ``Taiwan,'' and adding ``Malta, Moldova,'' and ``Taiwan, Ukraine,'' in

their places, respectively.

The revision reads as follows:

52.225-23 Required Use of American Iron, Steel, and Manufactured Goods--Buy American Statute--Construction Materials Under Trade Agreements.

* * * * *

Required Use of American Iron, Steel, and Manufactured Goods--Buy American Statute--Construction Materials Under Trade Agreements (Oct 2016)

* * * * *

[FR Doc. 2016-23202 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23203]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2005-91; FAR Case 2014-018; Item IX; Docket No. 2014-0018, Sequence No. 1]

RIN 9000-AN07

Federal Acquisition Regulation: Contractors Performing Private Security Functions

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to remove the DoD-unique requirements for contractors performing private security functions outside the United States and provide a definition of ``full cooperation'' within the associated clause.

DATES: Effective: October 31, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-91, FAR Case 2014-018.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 80 FR 30202 on May 27, 2015, to implement section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub. L. 110-181) (as amended by other NDAAs, see 10 U.S.C. 2302 Note). This rule amends FAR 25.302, Contractors performing private security functions outside the United States, and the associated clause at 52.225-26 to remove the DoD-unique requirements, which were incorporated in the Defense Federal Acquisition Regulation Supplement (DFARS) on June 30, 2016 (81 FR 42559). This rule also adds the definition of ``full cooperation'' to FAR clause 52.225-26 in order to affirm that the contract clause does not foreclose any contractor rights arising in law, the FAR, or the terms of the contract when cooperating with any Government-authorized investigation into incidents reported pursuant to the clause.

One respondent submitted comments on the proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comment in the development of the final rule.

A. Summary of Significant Changes

There were no changes made to the rule as a result of the one comment received. There were no comments on the Regulatory Flexibility Analysis.

B. Analysis of Public Comments

A discussion of the comment follows:

Employing quasi-military armed forces:

Comment: The respondent did not comment on any of the proposed changes in the proposed rule. The respondent commented on the alleged

employment of mercenaries by contractors performing private security functions overseas and further stated that this is prohibited as codified at 5 U.S.C. 3181. The respondent recommended a change to the FAR to make it clear that the U.S. Government will not employ mercenaries.

Response: The respondent's comments are not within the scope of this rule.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The objective of this rule is to amend FAR 25.302, Contractors performing private security functions outside the United States, and the associated clause at 52.225-26 to remove the DoD-unique requirements, which will be incorporated in the Defense Federal Acquisition Regulation Supplement (DFARS). The rule also adds a definition of ``full cooperation'' to FAR clause 52.225-26 in order to affirm that the contract clause does not foreclose any contractor rights arising in law, the FAR, or the terms of the contract when cooperating with any Government-authorized investigation into incidents reported pursuant to the clause.

No comments were received from the public relative to the initial regulatory flexibility analysis.

DoD, GSA, and NASA do not expect this final rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Based on data available in the Federal Procurement Data System (FPDS), DoD awarded 403 contracts in FY 2013 in support of a designated contingency operation outside of the United States, of which 63 contracts (15.6 percent) were awarded to small businesses. Therefore, it is estimated that this rule will apply to approximately 63 small businesses.

This rule does not create any new reporting, recordkeeping, or other compliance requirements.

There are no known significant alternatives to the rule. The impact of this rule on small business is not expected to be significant because it is removing DoD-unique requirements from the FAR, to be incorporated in the DFARS.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

This rule does not affect the information collection requirements in FAR clause 52.225-26, currently approved under OMB Control Number 9000-0184, titled: Contractors Performing Private Security Functions Outside the United States, in accordance with the Paperwork Reduction Act (44 U.S.C. chapter 35). The estimated total annual public hour and cost burden in OMB control number 9000-0184 was calculated based on data for the contracts and subcontracts of non-DoD agencies, because DoD's information collection was previously approved under OMB control number 0704-0460. Therefore, removing the DoD-unique requirements from the FAR does not impact the approved estimates for OMB clearance 9000-0184.

List of Subject in 48 CFR Parts 25 and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 25 and 52 as set forth below:

1. The authority citation for 48 CFR parts 25 and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 25--FOREIGN ACQUISITION

25.302-2 [Amended]

2. Amend section 25.302-2 by removing from the definition ``Other significant military operations'' the phrase ``(see 25.302-3(b)(2)).'' and adding ``(see 25.302-3(a)(2)).'' in its place.

3. Amend section 25.302-3 by--

a. Revising paragraph (a);

b. Removing paragraph (b); and

c. Redesignating paragraphs (c) through (e) as paragraphs (b) through (d), respectively.

The revision reads as follows:

25.302-3 Applicability.

(a) This section applies to contracts that require performance outside the United States--

(1) In an area of combat operations as designated by the Secretary of Defense; or

(2) In an area of other significant military operations as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

* * * * *

25.302-4 [Amended]

4. Amend section 25.302-4 by--

a. Removing from paragraph (a)(1) ``(PSCs) Operating in Contingency Operations, Combat Operations, or Other Significant Military Operations'' and adding ``Operating in Contingency Operations'' in its place; and

b. Removing from paragraph (a)(2) ``to cooperate'' and adding ``to fully cooperate'' in its place.

5. Amend section 25.302-6 by revising paragraph (a) to read as follows:

25.302-6 Contract clause.

(a) Use the clause at 52.225-26, Contractors Performing Private Security Functions Outside the United States, in solicitations and contracts for performance outside the United States in an area of--

(1) Combat operations, as designated by the Secretary of Defense; or

(2) Other significant military operations, as designated by the Secretary of Defense and only upon agreement of the Secretary of Defense and the Secretary of State.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Amend section 52.212-5 by--

a. Revising the date of the clause, paragraphs (b)(51) and (e)(1)(xviii); and

b. Amending Alternate II by--

1. Revising the date of Alternate II;

2. Redesignating paragraphs (e)(1)(ii)(O) through (R) as paragraphs (e)(1)(ii)(P) through (S), respectively; and

3. Adding a new paragraph (e)(1)(ii)(T).

The revisions read as follows:

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items (Oct 2016)

* * * * *

(b) * * *

_ (51) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Oct 2016) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

* * * * *

(e)(1) * * *

(xviii) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Oct 2016) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

* * * * *

Alternate II (Oct 2016). * * *

* * * * *

(e)(1) * * *

(ii) * * *

(T) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Oct 2016) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

* * * * *

7. Amend section 52.213-4 by revising the date of the clause and paragraph (a)(2)(viii) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than

Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items) (Oct 2016)

* * * * *

(a) * * *

(2) * * *

(viii) 52.244-6, Subcontracts for Commercial Items (Oct 2016).

* * * * *

8. Amend section 52.225-26 by--

a. Revising the introductory text and the date of the clause;

b. Revising the introductory text of paragraph (a); and adding in alphabetical order, the definitions ``Area of combat operations'', ``Full cooperation'', and ``Other significant military operations'';

c. Revising paragraph (b);

d. Removing from paragraph (c)(2)(i) ``(PSCs) Operating in Contingency Operations, Combat Operations, or Other Significant Military Operations'' and adding ``Operating in Contingency Operations'' in its place;

e. Removing from paragraph (c)(3) ``Cooperate'' and adding ``Provide full cooperation'' in its place; and

f. Revising paragraph (f).

The revisions read as follows:

52.225-26 Contractors Performing Private Security Functions Outside the United States.

As prescribed in 25.302-6, insert the following clause:

Contractors Performing Private Security Functions Outside the United States (Oct 2016)

(a) Definitions. As used in this clause--

Area of combat operations means an area of operations designated as such by the Secretary of Defense when enhanced coordination of contractors performing private security functions working for Government agencies is required.

Full cooperation--

(1) Means disclosure to the Government of the information sufficient to identify the nature and extent of the incident and the individuals responsible for the conduct. It includes providing timely and complete responses to Government auditors' and investigators' requests for documents and access to employees with information;

(2) Does not foreclose any Contractor rights arising in law, the FAR, or the terms of the contract. It does not require--

(i) The Contractor to waive its attorney-client privilege or the protections afforded by the attorney work product doctrine; or

(ii) Any officer, director, owner, or employee of the Contractor, including a sole proprietor, to waive his or her attorney-client privilege or Fifth Amendment rights; and

(3) Does not restrict the Contractor from--

(i) Conducting an internal investigation; or

(ii) Defending a proceeding or dispute arising under the contract or related to a potential or disclosed violation.

Other significant military operations means activities, other than combat operations, as part of a contingency operation outside the United States that is carried out by United States Armed Forces in an uncontrolled or unpredictable high-threat environment where personnel performing security functions may be called upon to use deadly force.

* * * * *

(b) Applicability. If this contract is performed both in a designated area and in an area that is not designated, the clause only applies to performance in the following designated areas--

(1) Combat operations, as designated by the Secretary of Defense; or

(2) Other significant military operations, as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

* * * * *

(f) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (f), in all subcontracts that will be performed outside the United States in areas of--

(1) Combat operations, as designated by the Secretary of Defense; or

(2) Other significant military operations, upon agreement of the Secretaries of Defense and State that the clause applies in that area.

* * * * *

9. Amend section 52.244-6 by revising the date of the clause and paragraph (c)(1)(xv) to read as follows:

52.244-6 Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Oct 2016)

* * * * *

(c) * * *

(1) * * *

(xv) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Oct 2016) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

[FR Doc. 2016-23203 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23204]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 2005-91; FAR Case 2014-012; Item X; Docket No. 2014-0012; Sequence No. 1]

RIN 9000-AM75

Federal Acquisition Regulation: Limitation on Allowable Government Contractor Employee Compensation Costs

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA and NASA are adopting as final, with changes, an interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Bipartisan Budget Act of 2013. The final rule revises the allowable cost limit relative to the compensation of contractor and subcontractor employees. Also, this final rule implements the narrowly targeted exception to this allowable cost limit for scientists, engineers, or other specialists upon an agency determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities.

DATES: Effective: September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Kathlyn J. Hopkins, Procurement Analyst, at 202-969-7226, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2014-012.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 79 FR 35865 on June 24, 2014, to implement section 702 of The Bipartisan Budget Act of 2013 (Pub. L. 113-67), which amended the allowable cost limits of contractor and subcontractor employee compensation. Specifically, section 702 revised the application of the compensation cap, the amount of the cap, and the associated formula for annually adjusting it. The existing formula for determining the limit on the allowability of contractor and subcontractor employee compensation costs under 41 U.S.C. 1127 was repealed for contracts awarded on or after June 24, 2014. Section 702 of the law set the initial limitation on allowable contractor and subcontractor employee compensation costs at $487,000 per year, which will be adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics. This final rule also implements the authority provided by 10 U.S.C. 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), as amended by section 702(a), in which Congress has authorized the heads of Executive agencies to establish ``one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities.''

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments is provided as follows:

A. Summary of Significant Changes

This final rule adopts the interim rule with four changes for clarification.

The first clarification entails the addition of a table to FAR 31.205-6(p) that summarizes the applicability dates contained in this FAR section.

The second clarification concerns the reorganization of the FAR text. Existing FAR paragraph 31.205-6(p)(4) has become new paragraph (p)(1), with existing paragraph (p)(1) becoming new paragraph (p)(2). Existing FAR paragraphs 31.205-6(p)(2) and (p)(3) have become new paragraphs (p)(3) and (p)(4), respectively.

The third clarification entails the removal of the following redundant FAR 31.205-6 text:

[cir] Paragraph (p)(2)(ii) text ``Costs incurred after January 1, 1998.''

[cir] Paragraph (p)(3)(ii) text ``Costs incurred after January 1, 2012.''

[cir] Paragraph (p)(4)(ii) text ``Costs incurred on or after June 24, 2014.''

The fourth clarification entails reference links in paragraphs (p)(2) and (p)(3) (see https://www.whitehouse.gov/omb/procurement_index_exec_comp/) and another reference link in paragraph (p)(4) (see http://www.whitehouse.gov/omb/procurement/cecp). Additionally, some statutory references and explanatory text were added in FAR paragraphs 31.205-6(p)(3) and (p)(4).

B. Analysis of Public Comments

The Regulatory Secretariat Division received responses from three respondents to the interim rule, which are discussed below:

1. Support for the Rule

Comment: One respondent strongly supported the interim rule and applauded the FAR issuing agencies for meeting the statutory deadline for issuance of this rule.

Response: The Government notes the public support for this rule.

2. Application of Rule to Nonprofit Organizations

Comment: One respondent stated that the rule only referenced FAR 31.205-6. Respondent questioned whether this means that the new compensation cap will only apply to contractors or subcontractors that follow this FAR section; would a nonprofit organization that complies with FAR subpart 31.7 be exempt from the compensation cap; or will FAR subpart 31.7 be amended as well.

Response: A nonprofit organization that complies with FAR subpart 31.7 is not exempt from the compensation cap in this rule. Previously, FAR 31.702 referenced the Office of Management and Budget (OMB) Circular Number A-122, Cost Principles for Non-Profit Organizations. The recent FAR case 2014-023 updated the reference from OMB Circular A-122 to the revised OMB Uniform Guidance at 2 CFR 200, subpart E, and applicable appendices, as in effect on the date of the contract, which references the statutory compensation ceilings. These cost principles reference the compensation cap contained in this FAR rule.

3. Retroactive Application of Rule Not Appropriate

Comment: The interim rule stated that the revised compensation cap ``will apply to the costs of compensation for all contractor and subcontractor employees for contracts awarded, and cost incurred, on or after June 24, 2014.'' One respondent stated that reading this sentence literally, the interim rule provides that all executive compensation costs are subject to the revised cap no matter when the contracts to which such costs are allocated were awarded which makes application of the rule retroactive which is inappropriate.

Response: The rule applies to costs incurred on contracts awarded on or after June 24, 2014, and does not apply retroactively to contracts awarded before June 24, 2014. For further clarification, Table 31.1 has been added as a summary of the applicability of the three compensation caps.

4. Application of Rule to Fixed-Price Contracts

Comment: One respondent requested that specific preamble language be included in the final rule that reinforces the existing FAR part 31 language which specifies the application of the cost principles to fixed-price contracts whenever cost analysis is performed. Respondent also stated that by allowing fixed-price contracts that are subject to cost analysis to evade this compensation cap defeats Congressional intent and costs taxpayers significantly.

Response: The reinforcement of this existing FAR part 31 language is unnecessary. This FAR rule revises FAR 31.205-6 specifically regarding the allowability of executive compensation. Other FAR cost principle sections such as 31.102 remain unchanged in their application and use, including when the cost principles are applicable to fixed-price contracts.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

DoD, GSA, and NASA do not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. because, an analysis of data in the Federal Procurement Data System (FPDS) revealed that most contracts awarded to small entities are awarded on a fixed-price basis, and do not require application of the cost principle contained in this rule.

The rule imposes no reporting, recordkeeping, or other information collection requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules, and there are no known significant alternatives to the rule.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Act (44 U.S.C. chapter 35).

List of Subject in 48 CFR Part 31

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Interim Rule Adopted As Final With Changes

Accordingly, the interim rule amending 48 CFR part 31 which was published in the Federal Register at 79 FR 35865 on June 24, 2014, is adopted as a final rule with the following changes:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR part 31 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

2. Amend section 31.205-6 by revising paragraph (p) to read as follows:

31.205-6 Compensation for personal services.

* * * * *

(p) Limitation on allowability of compensation.

Table 31-1--Employee Compensation Limits

Contract award date

Applicable agencies

Covered employees

31.205-6

Before June 24, 2014

Executive Agencies Other than DoD, NASA and Coast Guard.

Senior Executive

(p)(2).

Before December 31, 2011

DoD, NASA and Coast Guard.

Senior Executive

(p)(2).

On/after December 31, 2011, and before June 24, 2014.

DoD, NASA, and Coast Guard

All Employees

(p)(3).

On/after June 24, 2014

All Executive Agencies

All Employees

(p)(4).

(1) Definitions. As used in this paragraph (p)--

(i) Compensation means the total amount of wages, salary, bonuses, deferred compensation (see paragraph (k) of this subsection), and employer contributions to defined contribution pension plans (see paragraphs (j)(4) and (q) of this subsection), for the fiscal year, whether paid, earned, or otherwise accruing, as recorded in the contractor's cost accounting records for the fiscal year.

(ii) Senior executive means--

(A) Prior to January 2, 1999--

(1) The Chief Executive Officer (CEO) or any individual acting in a similar capacity at the contractor's headquarters;

(2) The four most highly compensated employees in management positions at the contractor's headquarters, other than the CEO; and

(3) If the contractor has intermediate home offices or segments that report directly to the contractor's headquarters, the five most highly compensated employees in management positions at each such intermediate home office or segment.

(B) Effective January 2, 1999, the five most highly compensated employees in management positions at each home office and each segment of the contractor, whether or not the home office or segment reports directly to the contractor's headquarters.

(iii) Fiscal year means the fiscal year established by the contractor for accounting purposes.

(iv) Contractor's headquarters means the highest organizational level from which executive compensation costs are allocated to Government contracts.

(2) Senior executive compensation limit for contracts awarded before June 24, 2014--(i) Applicability. This paragraph (p)(2) applies to the following:

(A) To all executive agencies, other than DoD, NASA and the Coast Guard, for contracts awarded before June 24, 2014;

(B) To DoD, NASA, and the Coast Guard for contracts awarded before December 31, 2011;

(ii) Costs incurred after January 1, 1998, for the compensation of a senior executive in excess of the benchmark compensation amount determined applicable for the contractor fiscal year by the Administrator, Office of Federal Procurement Policy (OFPP), under 41 U.S.C. 1127 as in effect prior to June 24, 2014, are unallowable (10 U.S.C. 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), as in effect prior to June 24, 2014). This limitation is the sole statutory limitation on allowable senior executive compensation costs incurred after January 1, 1998, under contracts awarded before June 24, 2014, and applies whether or not the affected contracts were previously subject to a statutory limitation on such costs. (Note that pursuant to section 804 of Pub. L. 105-261, the definition of ``senior executive'' in paragraph (p)(1) of this section has been changed for compensation costs incurred after January 1, 1999.) See https://www.whitehouse.gov/omb/procurement_index_exec_comp/.

(3) All employee compensation limit for contracts awarded before June 24, 2014.

(i) Applicability. This paragraph (p)(3) applies to DOD, NASA, and the Coast Guard for contracts awarded on or after December 31, 2011, and before June 24, 2014.

(ii) Costs incurred after January 1, 2012, for the compensation of any contractor employee in excess of the benchmark compensation amount, determined applicable for the contractor fiscal year by the Administrator, Office of Federal Procurement Policy (OFPP) under 41 U.S.C. 1127 as in effect prior to June 24, 2014 are unallowable (10 U.S.C. 2324(e)(1)(P) as in effect prior to June 24, 2014.) This limitation is the sole statutory limitation on allowable employee compensation costs incurred after January 1, 2012, under contracts awarded on or after December 31, 2011 and before June 24, 2014. (Note that pursuant to section 803 of Pub. L. 112-81, 10 U.S.C. 2324, Allowable costs under defense contracts, was amended by striking ``senior executives'' and inserting ``any contractor employee'', making unallowable the excess compensation costs incurred after January 1, 2012, under affected contracts.) See https://www.whitehouse.gov/omb/procurement_index_exec_comp/.

(4) All employee compensation limit for contracts awarded on or after June 24, 2014.

(i) Applicability. This paragraph (p)(4) applies to all executive agency contracts awarded on or after June 24, 2014, and any subcontracts thereunder.

(ii) Costs incurred on or after June 24, 2014, for the compensation of all employees in excess of the benchmark compensation amount determined applicable for the contractor fiscal year by the Administrator, Office of Federal Procurement Policy (OFPP) are unallowable under 10 U.S.C. 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), as in effect on or after June 24, 2014, pursuant to section 702 of Public Law 113-67. This limitation is the sole statutory limitation on allowable employee compensation costs incurred on or after June 24, 2014, under contracts awarded on or after June 24, 2014. See http://www.whitehouse.gov/omb/procurement/cecp.

(iii) Exceptions. An agency head may establish one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. In making such a determination, the agency shall consider, at a minimum, for each contractor employee in a narrowly targeted excepted position--

(A) The amount of taxpayer funded compensation to be received by each employee; and

(B) The duties and services performed by each employee.

[FR Doc. 2016-23204 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23205]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 22, 23, 26, and 52

[FAC 2005-91; Item XI; Docket No. 2016-0052; Sequence No. 4]

Federal Acquisition Regulation; Technical Amendments

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document makes amendments to the Federal Acquisition Regulation (FAR) in order to make editorial changes.

DATES: Effective: September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Hada Flowers, Regulatory Secretariat Division (MVCB), 1800 F Street NW., 2nd Floor, Washington, DC 20405, 202-501-4755. Please cite FAC 2005-91, Technical Amendments.

SUPPLEMENTARY INFORMATION: In order to update certain elements in 48 CFR parts 1, 4, 22, 23, 26, and 52 this document makes editorial changes to the FAR.

List of Subjects in 48 CFR Parts 1, 4, 22, 23, 26, and 52

Government procurement.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 4, 22, 23, 26, and 52, as set forth below:

1. The authority citation for 48 CFR parts 1, 4, 22, 23, 26, and 52 continues to read as follow:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.603-1 [Amended]

2. Amend section 1.603-1 by removing ``41 U.S.C. 1702(b)(3)(F)'' and adding ``41 U.S.C. 1702(b)(3)(G)'' in its place.

PART 4--ADMINISTRATIVE MATTERS

4.1400 [Amended]

3. Amend section 4.1400 by removing ``http://usaspending.gov'' and adding ``https://www.usaspending.gov'' in its place.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

22.805 [Amended]

4. Amend section 22.805 by removing from paragraph (a)(4)(i) http://www.dol-esa.gov/preaward/'' and adding ``https://ofccp.dol-esa.gov/preaward/pa_reg.html'' in its place.

PART 23--ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

23.704 [Amended]

5. Amend section 23.704 by removing from paragraphs (b)(1)(iv) and (b)(2) ``www.epa.gov/epeat'' and adding ``https://www.epa.gov/greenerproducts/epas-recommendations-specifications-standards-and-ecolabels'' in its place.

PART 26--OTHER SOCIOECONOMIC PROGRAMS

6. Amend section 26.103 by revising paragraph (b) to read as follows:

26.103 Procedures.

* * * * *

(b) In the event of a challenge to the representation of a subcontractor, the contracting officer shall refer the matter to the U.S. Department of the Interior, Bureau of Indian Affairs (BIA), Attn: Acquisition Management Director, 12220 Sunrise Valley Drive, Reston, VA 20191. The BIA will determine the eligibility and notify the

contracting officer.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

7. Amend section 52.234-1 by revising the section and clause headings and the definition ``Title III project contractor'' to read as follows:

52.234-1 Industrial Resources Developed Under Title III, Defense Production Act.

* * * * *

Industrial Resources Developed Under Title III, Defense Production Act (Sep 2016)

* * * * *

(a) Definitions.

* * * * *

Title III project contractor means a contractor that has received assistance for the development or manufacture of an industrial resource under Title III of Defense Production Act (50 U.S.C. App. 2091-2093).

* * * * *

[FR Doc. 2016-23205 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P

-----------------------------------------------------------------------

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]

[Rules and Regulations]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-23209]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket No. FAR 2016-0051, Sequence No. 5]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-91; Small Entity Compliance Guide

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Small Entity Compliance Guide.

-----------------------------------------------------------------------

SUMMARY: This document is issued under the joint authority of DOD, GSA, and NASA. This Small Entity Compliance Guide has been prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of the rules appearing in Federal Acquisition Circular (FAC) 2005-91, which amends the Federal Acquisition Regulation (FAR). An asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been prepared. Interested parties may obtain further information regarding these rules by referring to FAC 2005-91, which precedes this document.

These documents are also available via the Internet at http://www.regulations.gov.

DATES: September 30, 2016.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-91 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755.

Rules Listed in FAC 2005-91

Item

Subject

FAR case

Analyst

I

Prohibition on Contracting with Corporations with Delinquent Taxes or a Felony Conviction.

2015-011

Davis.

II

Updating Federal Contractor Reporting of Veterans' Employment.

2015-036

Delgado.

III

Non-Retaliation for Disclosure of Compensation Information (Interim).

2016-007

Delgado.

IV

Sole Source Contracts for Women-Owned Small Businesses.

2015-032

Uddowla.

V

Unique Identification of Entities Receiving Federal Awards.

2015-022

Delgado.

VI

Consolidation and Bundling.

2014-015

Uddowla.

VII

Amendment Relating to Multi-year Contract Authority for Acquisition of Property.

2016-006

Jackson.

VIII

New Designated Countries--Ukraine and Moldova.

2016-009

Davis.

VIII

Contractors Performing Private Security Functions.

2014-018

Jackson.

VIIII

Limitation on Allowable Government Contractor Employee Compensation Costs.

2014-012

Hopkins.

IX

Technical Amendments.

   

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-91 amends the FAR as follows:

Item I--Prohibition on Contracting With Corporations With Delinquent Taxes or a Felony Conviction (FAR Case 2015-011)

DoD, GSA, and NASA are adopting as final, without change, an interim rule, which amended the FAR to implement sections of the Consolidated and Further Continuing Appropriations Act, 2015. The rule prohibits the Federal Government from entering into a contract with any corporation having a delinquent Federal tax liability or a felony conviction under any Federal law, unless the agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government.

This final rule will not have a significant economic impact on a substantial number of small entities.

Item II--Updating Federal Contractor Reporting of Veterans' Employment (FAR Case 2015-036)

DoD, GSA, and NASA are adopting as final, without change, an interim rule amending the FAR to implement a final rule issued by the Department of Labor's Veterans' Employment and Training Service (VETS) that revised the regulations at 41 CFR part 61 implementing the reporting requirements under the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), as amended and the Jobs for Veterans Act (JVA) (Pub. L. 107-288). VEVRAA requires Federal contractors and subcontractors to annually report on the total number of their employees who belong to the categories of veterans protected under VEVRAA, as amended by the JVA, and the total number of those protected veterans who were hired during the period covered by the report. The VETS rule requires contractors and subcontractors to comply with its revised reporting requirements using the Form VETS-4212, in lieu of the VETS-100 and VETS-100A, beginning with the annual report filed in 2015.

There is no significant impact on small entities imposed by the FAR rule.

Item III--Non-Retaliation for Disclosure of Compensation Information (FAR Case 2016-007) (Interim)

DoD, GSA, and NASA are issuing an interim rule amending the FAR to implement Executive Order (E.O.) 13665, Non-Retaliation for Disclosure of Compensation Information, amending Executive Order 11246, Equal Opportunity in Federal Employment. The E.O. was signed April 8, 2014. The interim rule is also implementing the final rule issued by the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor (DOL) to implement the E.O. The DOL final rule was published in the Federal Register at 80 FR 54934, on September 11, 2015, entitled Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions.

E.O. 11246, originally issued September 24, 1965, establishes nondiscrimination and affirmative action obligations in employment for Federal contractors and subcontractors. It prohibits employment discrimination because of race, color, religion, sex, sexual orientation, gender identity, and national origin. E.O. 13665 amends E.O. 11246 and its Equal Opportunity Clause by incorporating, as a covered prohibition, discriminating against employees and job applicants who inquire about, discuss, or disclose the compensation of the employee or applicant or another employee or applicant. Federal contractors and subcontractors must disseminate this nondiscrimination provision, using language prescribed by the Director of OFCCP, including incorporating the provision into existing employee manuals or handbooks and posting it. There is no significant impact on small entities imposed by the FAR rule.

Item IV--Sole Source Contracts for Women-Owned Small Businesses (FAR Case 2015-032)

DoD, GSA, and NASA are adopting as final, with a minor edit, an interim rule that amends the FAR to implement regulatory changes made by the Small Business Administration (SBA) in its final rule as published in the Federal Register at 80 FR 55019, on September 14, 2015. SBA's final rule implements the statutory requirements of paragraph (a)(3) of section 825 of the Carl Levin and Howard P. `Buck' McKeon National Defense Authorization Act for Fiscal Year 2015, Public Law 113-291, which grants contracting officers the authority to award sole source contracts to economically disadvantaged women-owned small business (EDWOSB) concerns and to women-owned small business (WOSB) concerns eligible under the WOSB Program. The anticipated price, including options, must not exceed $6.5 million for manufacturing North American Industry Classification System (NAICS) codes, or $4 million for other NAICS codes.

This rule may have a positive economic impact on women-owned small businesses.

Item V--Unique Identification of Entities Receiving Federal Awards (FAR Case 2015-022)

DoD, GSA, and NASA are issuing a final rule amending the FAR to redesignate the terminology for unique identification of entities receiving Federal awards. The change to the FAR eliminates references to the proprietary Data Universal Numbering System (DUNS[supreg]) number, and provides appropriate references to the Web site where information on the unique entity identifier used for Federal contractors will be located. The Government does not intend to move away from the use of the DUNS[supreg] number in the short term. This final rule also establishes definitions of ``unique entity identifier'', and ``electronic funds transfer (EFT) indicator''. There is no significant impact on small entities imposed by the FAR rule.

Item VI--Consolidation and Bundling (FAR Case 2014-015)

This final rule incorporates regulatory changes made by the SBA in its final rule which published in the Federal Register at 78 FR 61113 on October 2, 2013, concerning consolidation and bundling. SBA's final rule implements sections 1312 and 1313 of the Small Business Jobs Act of 2010 (Pub. L. 111-240), as well as section 1671 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 (Pub. L. 112-239). The FAR final rule adds coverage on consolidations and reorganizes coverage on bundling at FAR 7.107. Before conducting a consolidated acquisition estimated to exceed $2,000,000, the Senior Procurement Executive or Chief Acquisition Officer must make a written determination that the consolidation is necessary and justified. This rule may have a positive economic impact on any small business entity that participates in the Federal procurement arena.

Item VII--Amendment Relating to Multi-Year Contract Authority for Acquisition of Property (FAR Case 2016-006)

DoD, GSA, and NASA are amending FAR subpart 17.1 to implement section 811 of the NDAA for FY 2016 (Pub. L. 114-92). Section 811 amended subsection (a)(1) of 10 U.S.C. 2306b by striking ``substantial'' and inserting ``significant''. This rule makes conforming changes at FAR 17.105-1(b)(1) to state that the head of an agency may enter into a multi-year contract for supplies, if the use of such a contract will result in significant savings of the total estimated costs of carrying out the program through annual contracts. This change applies to the DoD, NASA, and the Coast Guard.

This final rule is not required to be published for public comment, because it addresses an internal decision by the contracting officer to enter into a multi-year contract for supplies if certain objects are met. These requirements affect only the internal operating procedures of the Government.

Item VIII--New Designated Country--Ukraine and Moldova (FAR Case 2016-009)

This final rule amends the FAR to add Ukraine and Moldova as new d countries under the World Trade Organization Government Procurement Agreement (WTO GPA). This final rule has no significant impact on the Government and contractors, including small business entities.

Item IX--Contractors Performing Private Security Functions (FAR Case 2014-018)

This final rule amends FAR 25.302 and the clause at 52.225-26, both entitled ``Contractors Performing Private Security Functions Outside the United States.''

This rule removes the DoD-unique requirements, which have been incorporated in the Defense Federal Acquisition Regulations Supplement (DFARS). This rule also adds the definition of ``full cooperation'' to FAR clause 52.225-26 in order to affirm that the contract clause does not foreclose any contractor rights arising in law, the FAR, or the terms of the contract when cooperating with any Government-authorized investigation into incidents reported pursuant to the clause.

This rule will not create any new reporting, recordkeeping, or other compliance requirements. The impact of this rule on small business is not expected to be significant.

Item X--Limitation on Allowable Government Contractor Employee Compensation Costs (FAR Case 2014-012)

This final rule converts the interim rule published in the Federal Register at 79 FR 35865 on June 24, 2014 to a final rule with minor changes including a table summarizing the employee compensation limits and applicability dates is added at 31.205-6(p); several paragraphs are reorganized; redundant text is removed; reference links are added for clarity.

This final rule amends the Federal Acquisition Regulation (FAR) to implement section 702 of the Bipartisan Budget Act of 2013. Section 702 revises the allowable compensation cost limit for contractor and subcontractor employees to be $487,000, as adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics. Also, section 702 allows for the narrowly targeted exceptions to this allowable cost limit for scientists, engineers or other specialists, upon an agency determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities.

Because most contracts awarded to small businesses use simplified acquisition procedures or are awarded on a competitive, fixed-price basis, the impact of this compensation limitation on small businesses will be minimal.

Item XI--Technical Amendments

Editorial changes are made at FAR 1.603-1, 4.1400, 22.805, 23.704, 26.103, and 52.234-1.

Dated: September 19, 2016.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

[FR Doc. 2016-23209 Filed 9-29-16; 8:45 am]

BILLING CODE 6820-EP-P